With great respects to the views expressed by the Hon'ble Chairperson and his order, based on those views, we have to state that our understanding and views are different. We set forth hereunder in detail in our order, our understanding and views, based on materials on record, inspection of relevant document and averments as well as written submissions made during the course of the hearings. However, as our order would show, we are in agreement with the views of the Hon'ble Chairperson that the remand is not limited only to the issue of level playing field.
The Hon'ble Supreme Court of India in the Civil Appeal No. 3092 of 2002 had allowed the appeal against Telecom Disputes Settlement & Appellate Tribunal's order dated 15th March, 2002 in Petition No. 1 of 2001 and remitted the case back to the Tribunal for reconsideration of issues spelt out in the observations made in its Judgment dated 17th December, 2002 on the basis of materials already on record, after hearing the counsels for the parties concerned. In this Judgment, Justice G.B Pattnaik, CJ had spelt out broadly for reconsideration of the Tribunal the following 7 issues with special emphasis on the question of level playing field. These issues are:—
(i) The decision of the government is vitiated for non-compliance of Section 11(1)(a)(i) of the Act.
(ii) The NTP-1999 never contemplated of WLL with limited mobility and as such the decision to provide WLL with limited mobility to the Fixed Service Providers is beyond the policy in question.
(iii) The permission to offer WLL with limited mobility is arbitrary, unreasonable and unjust decision on the part of the Government.
(iv) TRAI while recommending by its letter dated 08.01.2001 had indicated for compliance of two conditions, but the government decision ultimately taken is contrary to the said recommendations and, therefore, is vitiated.
(v) The ultimate decision of the Government in fact does not deal with the question of level playing field between FSPs offering WLL with limited mobility and CMSPs, as a result of the discriminatory regulatory regime.
(vi) The impugned decision conferring the benefit of WLL with limited mobility to the Fixed Service Providers is nothing but a Cellular Mobile Service in SDCA and as such is a substitution for the same and such a substitution ought not to have been allowed.
(vii) The Government decision allowing Fixed Service Providers to provide WLL with limited mobility without any entry fee and without any charges for allocation of spectrum and even without a competitive bidding, amount to violation of the recommendations made by the TRAI dealing with new CMSPs licensees.
There is also a concurring judgment of Justice S.B Sinha in which additional reasons have been assigned for remitting the case back to the Tribunal and consideration of the matter afresh in accordance with law.
2. Before these issues were taken up for consideration, Mr. Ashok Desai, Sr. Advocate appearing for Telecom Watchdog, a voluntary organization, submitted that the remand was limited to the question of ‘level playing field’ and on all other issues judgment of Justice Pattnaik concluded the matter. This stand was supported by Dr. A.M Singhvi, Sr. Advocate appearing for Association of Basic Telecom Operators (ABTO) and the Solicitor General appearing for the Union of India. On the other hand, Mr. C.S Vaidyanathan, Sr. Advocate and Mr. Goolam E. Vahanvatti, Sr. Advocate appearing for the Petitioners submitted that the whole matter had to be considered afresh and no limitation of any kind is cast on the Tribunal in dealing with the issue of level playing field.
It was also submitted by the counsel for the Respondent that wherever judgment of Justice S.B Sinha deviates from that of Justice G.B Pattnaik, CJ, it should be taken as dissenting judgment to that extent. In this context it was stated that the judgment of Justice Pattnaik, CJ limited the remand to determination of level playing field and hence the observation of Justice Sinha that all issues are open before the Tribunal amounted to dissent and in such a situation the majority judgment of Justice Pattnaik, CJ should prevail. A careful study of the judgment of Justice Pattnaik, CJ shows that the remand is not limited to the question of level playing field only. The judgment specifically states that the matter is remitted to the Tribunal for reconsideration with special emphasis on the question of level playing field. This makes it clear that all issues brought out in the judgment of Justice Pattnaik, CJ are to be considered. Justice Sinha, while assigning additional reasons has also directed, while remitting the case back to the Tribunal, consideration of the matter afresh in accordance with law. We agree with the view of the Hon'ble Chairperson, TDSAT that the remand is not limited only to the question of level playing field.
3. Now, we proceed to deal with each of the 7 issues flagged in the judgement of Justice G.B Pattnaik, CJ.
4. The first issue flagged in this judgment is the decision of the Government being vitiated for non-compliance of Section 11(1)(a)(i) of the Telecom Regulatory Authority of India Act, 1997 as amended in 2000. The Petitioners have maintained that the mandatory requirement of Section 11(1)(a)(i) & (ii) read with 2nd Proviso of TRAI Act, 1997 has not been complied with. Section 11(1)(a)(i) & (ii) and the 2nd Proviso of TRAI Act, 1997 read as follows:—
“(1) Notwithstanding anything contained in the Indian Telegraph Act, 1885 (13 of 1885), the functions of the Authority shall be to -
(a) make recommendations, either suo moto or on a request from the licensor, on the following matters, namely;-(i) need and timing for introduction of new service provider; (ii) terms and conditions of licence to a service provider.
Proviso 2 — Provided further that the Central Government shall seek the recommendations of the Authority in respect of matters specified in sub-clauses (i) and (ii) of clause (a) of this sub-section in respect of new licence to be issued to a service provider and the Authority shall forward its recommendations within a period of sixty days from the date on which Government sought the recommendations;”
The contention of the Petitioners is that if Department of Telecommunications (DoT) wanted to grant mobility, it had to comply with the above Section since in their view, limited mobility was not covered under National Telecom Policy, 1999(NTP-1999) nor did the basic service licences provide for the same. Shri C.S Vaidyanathan, Senior Advocate and Counsel for the Petitioners made detailed submissions and the main points averred by him are as hereunder:—
(i) The NTP-1999 provided for three categories of access providers, namely; fixed, mobile and cable and the concept of limited mobility service is not there.
(ii) The provision of a wireless loop in the Fixed Service Provider(FSP) licence was also purely by way of a preferred technology and there was a clear distinction between Wireless in Local Loop(WLL) and Wireless in Local Loop (Mobile) [WLL(M)], particularly, when there is a clear prohibition to mobility in FSP licence as indicated in Clause 3 under Scope of Service and Clause 1.7.9.2 of the Licence Agreement for the basic telephone service.
(iii) The concept of wireless in local loop services without mobility is well known. Reference was made to an International Telecommunications Union(ITU) definition stating that “Fixed line is a physical line connecting the subscriber to the exchange, and also includes wireless in local loop (WLL) where the users terminal equipment is located in a fixed location.” As such NTP-1999 does not envisage mobility under the prevailing definition of fixed service provider as an access provider, which will be affected if WLL based mobility is allowed.
(iv) If NTP-1999 was clear in allowing mobility then there would have been no need to refer the matter to the Group on Telecom (GOT-IT) over a specific question as to whether NTP-1999 allows mobility and, if not, how is the policy to be amended to accommodate such mobility?
For the above reasons WLL(M) was a new service for which recommendation of the Telecom Regulatory Authority of India(TRAI) should have been sought under Section 11(1)(a) of the Telecom Regulatory Authority of India Act, 1997. Since this has not been done, the said provision of the Act stands violated. Shri Goolam Vahanvatti, Senior Advocate for the Petitioners also submitted that the 5th Proviso of Section 11 of the TRAI Act, 1997 will apply if the recommendations of the TRAI are not accepted. The matter will have to be sent to the TRAI for reconsideration. He further maintained that in case the Government accepts the recommendations, it must show the decision.
5. Dr. A.M Singhvi, Senior Advocate and the Counsel for the Association of Basic Telecom Operators(ABTO) maintained that the basic operators have been permitted under their licence to provide wireless in local loop using Code Division Multiple Access(CDMA) technology and use of handset in WLL service was only as a result of march of technology whereby the size of the receiving instrument shrunk from 4 pieces to 3 pieces and then finally to one piece of the size of one handset. It was also pointed out that Petitioners had no objection to wireline becoming wireless, copper cable being replaced by optical fibre, multiple exchanges converging into one mega exchange, and use of spectrum by basic service operators; but their grievance seemed to be limited to the size of instrument becoming smaller and being allowed to become partially mobile within the limited range of Short Distance Charging Area(SDCA). On the concept of limited mobility the Counsel for the ABTO referred to an ITU (International Telecommunications Union) document which has specifically recognized WLL with limited mobility with a range of 50 kilometers as part of basic/fixed service. It was also stated that the Telecom Engineering Centre (TEC), which is a Government body and sets technical standards recognizes that WLL in CDMA band is a part of basic service licence and also permits use of handsets by the subscriber.
6. The learned Solicitor General appearing for the Union of India submitted that as per the existing licence terms and conditions the Basic Service Operators are entitled to utilize wireless technology in local loop as one of the preferred technology. The Counsel maintained that from the year 1995 the question of allowing the basic service operators to switch over to handheld subscriber terminals has been under consideration and initially the view taken was that the licence of basic service operators did not permit this as it would encroach upon the restrictions in the Basic Service Operator(BSO) licence to mobile services and also because the technology of mobility on WLL platform was under trial and evaluation by MTNL. However, with the march of technology it became imperative to consider this possibility and there followed a series of developments which culminated in a recommendation by TRAI to amend the terms and conditions of BSO licence by allowing handheld subscriber terminals subject to certain restrictions and this recommendation was accepted and implemented through the Union of India guidelines on 25.01.2001 This removed the practical and legal impediment to allowing handheld terminals. He further submitted that there is nothing in NTP-1994 or NTP-1999 which prohibited the service and a broad and purposive construction of the policy envisages WLL(M) service. In this context, he referred to Para 3.1.2 of NTP-1999 which according to him specifically provided for this service. This paragraph also refers to making available appropriate frequency spectrum for WLL based service on payment of an additional one time fee over and above FSP entry fee. He further submitted that Para 1.3 of the NTP-1999 foreshadows convergence and is part of the general part of the policy that should override the specific parts of the policy. He also expressed the view that even if the proposition regarding inadmissibility of the WLL(M) service is accepted, NTP-1999 is a non-statutory instrument and does not create legal rights in favour of the cellular service providers.
7. The counsel for Reliance Infocomm submitted that the amendment in the licence can be made under the provisions in the licence and that the Licence Agreement of the cellular operators has been amended on a number of occasions and at no point has it been treated as a statutory amendment requiring change in the Act or Policy. He also submitted that far from there being any prohibition in basic licences, the licence specifically permitted mobility to a limited extent and referred to certain clauses such as 1.7.2.2, 1.7.2.5, 2.10 and 11.3b in the Fixed Service Providers Licence granted in 1997 which demonstrated that WLL(M) was a part of basic service licence. He also maintained that since WLL(M) is not a new service but a part of basic service, Section 11(1)(a)(i) & (ii) of the TRAI Act has no application in the present case. Similar averments were made by the counsel for Telecom Watchdog in his written submission.
8. Hence the issue of determination is whether allowing WLL with limited mobility in the basic service stream amounted to introduction of a new service. It is relevant to state here that under Section 4 of the Indian Telegraph Act 1885, the Central Government enjoys the exclusive privilege of establishing, maintaining and working telegraphs and also has the power to grant licences to others for the same purpose. This Act however, does not list out the types and categories of telecom services for which licence is required to be issued. It is understandable since the Government itself was the monopoly Service Provider until the opening up of the sub-sector of value added services to private investment in July, 1992 and opening up of basic telecom service to private participation in 1994 in terms of National Telecom Policy-1994. NTP-1994 identifies 8 categories of Value Added Service, namely,:—
(i) Electronic Mail
(ii) Voice Mail
(iii) Data Services
(iv) Audio Text Services
(v) Video Text Services
(vi) Video Conferencing
(vii) Radio Paging
(viii) Cellular Mobile Telephone
In respect first 6 of these services, eversince the opening up of the sub-sector of the “Value Added Services” to private investment in July 1992, the companies registered in India were permitted to operate under licence on non-exclusive basis. In regard to the last two value added services namely, Radio Paging and Cellular Mobile Telephone Service the policy document noted that a policy of selection will be continued in grant of licences through a system of tendering and certain criteria were specified which would be taken into account in finalizing the selection. It would be seen from the above that the general approach of the Government has been to grant service specific licence. It is however significant to note that the types and categories of licences/permissions, as they kept on evolving according to the needs and circumstances, were not made statutory either under the Indian Telegraph Act, 1885 or much later under the Telecom Regulatory Authority of India Act, 1997. Thus, the NTP-1994 envisages two categories of services, namely, the Basic Service and Value Added Service and cellular mobile services were placed under the head of “Value Added Services”. The NTP-1999 provided for the following categories of telecom service providers, namely:—
(i) Cellular Mobile Service Providers, Fixed Service Providers and Cable Service Providers, collectively referred to as ‘Access Providers’
(ii) Radio Paging Service Providers
(iii) Public Mobile Radio Trunking Service Providers
(iv) National Long Distance Operators
(v) Other Service Providers
(vi) Global Mobile Personal Communication by Satellite (GMPCS) Service Providers
(vii) V-SAT based Service Providers
This policy permitted the Cellular Mobile Service Providers to provide mobile telephony services including permission to carry its own long-distance traffic within their service area without seeking an additional licence. They were also allowed to provide in their service area of operation all types of mobile services including voice and non-voice messages, data services and PCOs utilizing any type of network equipment, including circuit and/or packet switches, that meet the relevant International Telecommunications Union(ITU)/Telecommunication Engineering Centre (TEC) standards. For all the above categories of services separate licences/permission are required to be taken. The Policy mentions about grant of permission to the Fixed Service Providers to establish “Last Mile” linkages to provide fixed services. It is significant that NTP-1999 noted the emergence of convergence of both market and technology which was making it possible for one group of service providers to widen their scope of service to include those for which there were other categories of licensed service providers. It could have, if such was the intention, categorically prohibited this development as unhealthy and undesirable which needed to be curbed. It did not do so. On the other hand, it urged “a relook into the existing policy framework.”
The counsels for Petitioners have urged consideration of the facts that Wireless in Local Loop permitted to the Fixed Service Providers in their original licence is basically to take care of the problems associated with connectivity in remote and/or congested areas and not to provide mobility, limited or otherwise and that wireless in this context is nothing more than a conduit for connectivity which cannot be equated with mobility, which is a service. The Petitioners have therefore, argued that the basic service differences between Fixed and Mobile Service Providers can not be obliterated or blurred by the fact that the Fixed Service Providers have been permitted from the very beginning to provide “last mile linkages” through wireless.
Perusal of the documents made available indicates that ever since the deregulation in the telecommunication sector began, the licences indeed have been service-specific. Access service categorization has been on the basis of either fixed service or mobile service, and not on the basis of the conduit, i.e wire-line or wireless. Seen from this angle, several communications from the Department of Telecommunications to Fixed Service Providers to use Wireless in Local Loop as a preferred technology, but not to provide mobile service (as has been brought to our notice) makes sense. Technologically, it is possible to provide suitably enabled handsets to receive and transmit voice messages through wireless in local loop within a limited area and thus provide limited mobility within that area. There are reasons to believe that the Department of Telecommunications was aware of this as MTNL was permitted to operate a Limited Mobility service on trial basis from 1997 and this service was on WLL platform. However, other basic service providers in the private sector were repeatedly advised not to use mobile handsets on WLL platform. This phenomenon was explained by the learned Counsel for Union of India as a deliberate and prudent decision as the technology was still under evaluation. Subsequently the licence of MTNL was amended in October 1997 to permit MTNL to provide Cellular Mobile Services in Delhi and Bombay. Quite obviously, thereafter MTNL could provide mobile services legitimately as a CMSP. The Metro Cellular Operators however challenged this decision on the grounds, inter alia, that TRAI's recommendation had not been obtained before introducing a new service-provider and that the duopoly regime of the Cellular Licensees was adversely affected. In an interim order dated 17.02.1998, TRAI held that obtaining the recommendation of TRAI before introducing a new service provider was a mandatory requirement. The case moved to the Delhi High Court thereafter and as pointed out by the Petitioners in their Petition dated 22.01.2001 the learned single Judge of the Delhi High Court and the Division Bench in their orders dated 16.07.1998 and 17.01.2000 respectively held that seeking of prior recommendation of TRAI was not mandatory before grant of licences by the Government.
9. It appears from the averments made by the counsels of the Petitioners, ABTO and Respondents as well as inspection of relevant records that the DoT had made a reference on 23rd April, 1999 to TRAI seeking its recommendations on the subject of issue of fresh licences for fixed service providers. In this reference the recommendations of the TRAI were sought for the issue of fresh licences in the vacant circles keeping in view the objectives of the New Telecom Policy - (i) number of private service providers in a circle besides DoT, (ii) Selection criteria; and (iii) Licence Fee structure. Again on July 12, 1999, DoT had made another reference to TRAI seeking its recommendations in regard to licence fee arrangement for migration of the existing cellular service operators in metros, cellular circles and basic services to NTP-1999 regime. In these two letters the DoT had not specifically asked for any recommendation for WLL(M) service. However, the TRAI had floated a Consultation Paper on 12th June, 2000 on the subject of licensing issues relating to fixed service providers. In this Consultation Paper, the issues in respect of basic service licence posed for consideration included the present scope of service, which does not cover mobile voice and non-voice service as well as mobile wireless access and whether there was a need to change the definition of basic services and its impact on other licensees such as CMTS.
10. Our attention was specifically drawn to a question posed by TRAI in this Consultation Paper under the heading “Access Network” which was as under:—
“(xxiv) The existing basic service licence prohibits mobility of the customers' terminal or telephone set. Similarly, the mobile service provider is debarred from giving fixed service. Should we change terms and conditions of the existing licence of both the Fixed Service Provider and Mobile Service Provider to accommodate the concept of limited mobility? If so, the scope of limited mobility needs to be defined, i.e, whether it should be at par with mobility of a cordless telephone set (say 100 M) or that of a Cellular Mobile set which is in Kms.”
It was argued that since this issue was not addressed by the TRAI in its recommendations to the Government in its communication dated 31st August, 2000, the Government had to draw the attention of TRAI and bring to its notice its latest thinking on this issue while referring to other issues for reconsideration in its communication dated 9th October, 2000.
11. It appears from the arguments advanced from the side of Petitioners as well as respondents and reference to relevant records that neither NTP-1999 nor the Licence Agreement of Basic Telephone Service mention about Wireless in Local Loop Service with limited mobility. The Licence Agreement for the basic telephone service does mention about the Wireless in Local Loop as a preferred technology and NTP-1999 mentions about allocation of appropriate frequency spectrum for WLL based service. It is also seen from the Licence Agreement for basic telephone service that WLL is a part of basic service licence. The question is whether from these provisions it can be deduced that mobility, limited or unlimited, can be permitted under WLL based service. There can be a view that WLL based fixed service is only permissible in the basic service stream and the moment the umbilical cord tying WLL with fixed service is cut and invested with the feature of mobility, limited or full, it moves from basic service stream to mobile service stream. In this view of the matter it assumes the character of a new service requiring compliance with the provisions contained in Section 11(1)(a)(i) & (ii) of TRAI Act, 1997 as also requiring operationalization of service through issue of a separate licence. In the same refrain it can also be held that any activity not listed categorically in the licence of an existing licensee would be viewed as a new activity. In such an event several activities already permitted without a separate licence as value added and/or supplementary services like SMS or E-mail permitted to CMSPs and Voice-mail and Audio Text permitted to BSOs would have to be treated as ab initio illegal and void. We have noted in this connection the written submission made by ABTO that the right to operate PCOs was given in the Basic Service Licence and not in the Cellular Service Licence. Our attention was drawn to Clause 2.2 of the Licence granted to the Basic Operators in this respect. It has been further stated that in granting permission to the CMSPs to operate Mobile PCOs, no regulatory process of hearing of stakeholders was carried out by the TRAI. The other view which is equally strong and persuasive is the contention about the mention of WLL both in the Licence Agreement for the basic telephone service as well as in the NTP-1999 which conclusively lend credence to the contention that WLL is a part of basic telephone service. In deciding the two contentions one has not only to see the various extant provisions but also to keep in view fast changing developments in the telecom sector. These changes give value addition to the existing services irrespective of the fact whether they are basic services or cellular services. In this view of the matter, it has to be reckoned that WLL has been recognized as a preferred technology both in NTP-1999 as well as in the Licence Agreement for basic telephone services. This preferred technology or any other technology for that matter can acquire various hues and colours to keep pace with technological developments. The basic question is whether the genesis of a service, in the particular case WLL lies in the basic or cellular field. Since, WLL has not been questioned as not belonging to basic service stream, either in the arguments put forth from both the sides and material available on record as also the fact that ITU document referred to in the course of arguments also recognizes WLL service and its growing utility, particularly in developing countries, it can appropriately be concluded that WLL is a part of basic service. Hence, WLL(M) has to be seen as value addition to WLL service, provided the nature and features of this service are qualitatively different from that of the cellular mobile service. It would suffice to state at this stage that WLL(M) has its root in WLL and only by virtue of the fact that limited mobility is allowed to WLL service, it cannot be viewed as a new service. Viewing the concept of WLL(M) from a developmental approach rather than a restrictive regulatory approach can play a positive and promotive role in meeting the needs of the market. The phenomenal rise in the number of subscribers, both fixed as well as mobile services in the wake of availability of additional and supplemental value-added services is a case in point. In this context we note that TRAI has unambiguously stated in its recommendations as under:—
“For Basic Service Providers, the Authority is not treating the provision of limited mobility with WLL as a service outside the ambit of their service provision. To do otherwise would be to prevent consumers to benefit from the views of technological progress. The Authority views WLL with mobility similar to a supplementary or value added service for basic service. In that sense, this service would be similar to the supplementary services and roaming services that are presently allowed for cellular mobile. The Authority is of the opinion that there is no reason to reconsider the issue of entry fee of Basic Service Providers, particularly, because the purpose of entry fee was mainly to deter non-serious entry of service providers.”
We have seen no technical reason or otherwise to differ from this opinion excepting on the issue of entry fee, the rationale for which has been discussed in the later part of this order. As observed by TRAI, Cellular Mobile Service Providers were already permitted to provide supplementary and/or value-added services as a part of their licenced activity even though these were not originally a part of their licence. This would not have been possible if the terms and conditions of the licence were such as not to permit any additional activity apart from what was indicated in the original licence, irrespective of the specific clause in the licence permitting the licensor to amend the licence on grounds stated.
From the above recital it is clear that while there was a decided change in the approach of the Government in agreeing to permit limited mobility to the Fixed Service Providers, this change was brought about after duly consulting and obtaining the recommendations of TRAI. Thus, it can not be stated that there was non-compliance of Section 11(1)(a)(i) and (ii) of the TRAI Act. NTP-1999 talks about WLL as preferred technology and it is not necessary for a policy document to cross the ‘t’s and dot the ‘i’s in every detail and encompass within it all the future developments, particularly, in a sector like telecom where the scenario is changing at a very rapid pace. A policy document in telecom sector can not be viewed as a rigid and inflexible instrument which has to be amended everytime technical and developmental imperatives have to be accommodated and introduced within the system. NTP-1999 is a non-statutory document, as was its predecessor — NTP-1994. Its objective is to promote development consistent with other broad socio-economic goals.
12. As regards the argument that the Government did not accept some of the recommendations made by the TRAI and took decisions without asking the TRAI to reconsider them, as required under the fifth proviso to Section 11 of the TRAI Act, the stand of the Union of India was that all the basic recommendations of the TRAI were accepted and hence there was no need or relevance to make a back reference. It was pointed out that in its recommendations, TRAI raised four issues for consideration and made recommendations on them. These were as under:
“(i) Whether WLL with Mobility should be permitted;
(ii) If it is to be permitted what should be its extent, i.e how much mobility is to be allowed;
(iii) The likely economic consequences of the mobility granted as in (ii) above and their impact on the main stake-holders, and;
(iv) In case the likely consequences of the grant of mobility are adverse for any of the stake-holders in economic terms, do these merit mitigation? If so, to what extent such mitigation is feasible and needed and what would be the modus operandi to achieve it.”
The recommendations of TRAI regarding these issues were as under:
(i) “….. TRAI has arrived at the conclusion that in case the WLL Mobility is not the same as that of the Cellular Mobile Services and provided that the disturbance expected to be created in the level playing field by the BSOs introducing this service can be evened out by making some necessary policy changes, permitting WLL with mobility will be in the best interests of the consumer and the telecom services in the country;”
(ii) “The Authority recommends that the Basic Service Operator (BSO) be allowed to offer WLL with mobility within the local area, i.e, Short Distance Charging Area (SDCA)”;
(iii) & (iv) “Consequent upon the offering of WLL mobile services by the BSOs and its level playing field the TRAI is of the view that for the cellular services to maintain their competitive ability, some policy changes and ameliorative measures would need to be adopted. TRAI has therefore recommended bringing down the licence fee (revenue sharing) of the Cellular Operators to the level of Metro and ‘A’ circles of the Basic Service Operators, i.e 12%, increasing the number of Points of Interconnection, permitting the CMSOs to provide fixed phones based on their GSM network infrastructure, and allowing them to retain as their collection charges and cover for bad debts 5% of the total amount of long distance calls and other revenues that the CMSOs collect from their subscribers which they pass on to the basic service operator. So as to increase competition among BSOs in a service area, the CDMA band of 20 MHz in the 800/900 MHz band is recommended to be distributed among 4 operators in each Basic Service Area, i.e, 5 MHz each instead of 8 MHz. The entry fee and percentage revenue share licence fee should be the same as already recommended for Basic Services. As Basic Service tariff rates will continue to apply for wireline as well as WLL fixed and hand-held terminal mobility within the SDCA, TRAI does not recommend any additional Entry Fees for the Spectrum. Existing mode of charging for spectrum should be applied for new operators also. The basis of charging for WLL frequency spectrum in the CDMA band and the cellular mobile spectrum in the GSM band should be identical.”
It was contended by the Union of India that since all these recommendations were accepted by the Government there was no question of referring back any question to TRAI. The detailed guidelines for issue of licence for Basic Service, issued by the Government on 25.01.2001, do confirm that these four major recommendations made by the TRAI for introduction of WLL(M) services by the Basic Service Operators were accepted by the Government. Records produced before us also indicate that TRAI had held open discussions and consultations with all the stake-holders before finalizing its recommendations and had taken note of the various inputs received from them. We therefore are unable to agree that the recommendations of the TRAI were either hasty or based on inadequate materials. Additionally, we maintain that the competence of the Government to amend the licence cannot be questioned as the same is provided for in Clause 13(ii) of the Fixed Service Providers Licence Agreement and Clause 14(ii) of the Cellular Mobile Service Providers Licence Agreement. Hence the point that there has been non-compliance with the 5th proviso to Section 11 of the TRAI Act is not well substantiated.
13. The second issue flagged in the judgement of Justice G.B Pattnaik, CJ is that the decision to permit WLL with limited mobility to fixed service provider is beyond the policy in question, as NTP-1999 never contemplated WLL with limited mobility. In dealing with this issue one has to go into the background as well as the main focus of NTP-1999 and submissions made by the parties as well as material available on record.
14. Perusal of National Telecom Policy-1999 makes it clear that its necessity arose as a result of non-fulfillment of some of the targets envisaged in the objectives of NTP-1994 as also from a realization of far reaching developments in the telecom, IT, consumer electronics and media industry worldwide and convergence of both markets and technology as well as blurring of difference between different conduit systems such as wireline and wireless as a result of technology as also to facilitate India's vision of becoming an IT super-power and develop a world-class telecom infrastructure in the country. One of the objectives of the New Telecom Policy is to transform in a time-bound manner the telecom sector to a greater extent in both urban and rural area providing equal opportunity and level playing field for all players.
15. Another important objective was to encourage development of telecom in rural areas making it more affordable by suitable tariff structure and making rural communication mandatory for all fixed service providers. NTP-1999 provides only 3 categories of service providers, namely, Cellular Mobile Service Providers, Fixed Service Providers and Cable Service Providers (collectively referred to as Access Providers). It specifically mentions that the Fixed Service Provider shall be free to provide in his service area of operation all types of fixed services including voice and non-voice messages and data services utilizing any type of network equipment including circuit and/or packed features that meet ITU/TEC standards. However, for WLL services, the policy document emphasizes on the essentiality of availability of appropriate frequency spectrum as required not only for providing optimal bandwidth to other operators but also for entry of additional operator. The policy document further states that WLL frequency shall be awarded to the FSPs requiring the same based on a payment of additional one time fee over and above the FSP entry fee. It also states that the FSP utilizing WLL shall pay a licence fee in the form of revenue share for spectrum utilization and this percentage of revenue share shall be over and above the percentage payable for the FSP licence and the recommendation in this regard will be given by TRAI in a time bound manner, keeping in view the objectives of the New Telecom Policy.
16. The Counsel for the Petitioners submitted in the course of argument that NTP-1999 does not permit FSPs to offer mobility of any form, since the policy visualizes convergence between broadcasting and telecom sectors as is between wireless and wireline and then provides for three sector specific access providers, namely; Cellular, Fixed Service and Cable Service providers as also their domain under the new Policy framework. It was also indicated that in the case of Cable Service Operators that if they wanted to provide two-way communication, they would have to obtain a separate and distinct Fixed Service Providers Licence. It was therefore argued that, following the same analogy, if the Fixed Service Providers wanted to provide Mobile Services, limited or otherwise, they would need to have a separate and distinct Cellular Mobile Service Providers Licence. It was also submitted that when the Migration Package was offered there was no suggestion of any kind whatsoever that the fundamental provision with regard to the prohibition of mobility in the basic service licence would be done away with on the basis of mobility being “embedded” in the licence and the service specific differentiation would be obliterated. The Counsel of the Petitioners further pointed out that the Petitioners had acquired rights and benefits to provide cellular service under their licence on payment of valuable consideration (Rs. 9000 Crores) and had made huge investment of approximately Rs. 25,000 Crores under a clear understanding that the licences were service specific and that FSPs were prohibited from providing mobile services. The Counsel for the Petitioners also narrated the sequence of events relating to their objection to MTNL's providing mobile service including WLL(M). COAI had also addressed a letter to the Chairman, Telecom Commission on 11th August, 1998 reiterating that only cordless telephony which has a maximum range of 100 meters can be permitted. Even in 1999, COAI had written to TRAI on 17th April, 1999 and DoT had given a comprehensive clarification in September, 1999. The counsel further submitted that certain events took place after 3rd August, 2000 which made DoT change its stance. The events narrated in the written submission refers to a meeting of CII representative with Secretary, DoT on 25th August, 2000 seeking a clarification regarding use of handheld sets, the letter written by ABTO on 2nd September, 2000 to Secretary, Communications raising a demand for giving full mobility to the existing basic operators on the pretext of a apprehension that mobile operators will enter the basic services by obtaining separate FSP licence, protest letter of COAI dated 6th September, 2000 to Secretary, DoT expressing lack of information of any such order allowing cellular operators to offer basic services and report in the Hindustan Times dated 31st September, 2000 to the effect that the DoT on 21st September, 2000 had decided to allow BSOs to offer limited mobility using WLL technology within the SDCA. All these points were made to substantiate that there was a predetermination of mind on the part of DoT.
17. The contention of the counsel for Petitioners was challenged by the learned Solicitor General on behalf of the Union of India and other learned counsels of the Respondents. The Counsel for the Union of India submitted that there is nothing in the NTP of 1994 or 1999 which prohibits the WLL Service and he explained at length the provisions of Paragraph 3.1.2 of NTP-1999 in this context which reads, inter alia, as under:—
“3.1.2Fixed Service Providers
The Fixed Service Providers(FSP) shall be freely permitted to establish “last mile” linkages to provide fixed services and carry long distance traffic within their service area without seeking an additional licence……The FSP shall be free to provide, in his service area of operation, all types of fixed services including voice and non-voice messages and data services, utilizing any type of network equipment, including circuit and/or packet switches, that meet the relevant International Telecommunication Union (ITU)/Telecommunication Engineering Center(TEC) standards…………..As in the case for cellular, for WLL also, availability of appropriate frequency spectrum as required is essential not only for providing optimal bandwidth to every operator but also for entry of additional operators. It is proposed to review the spectrum utilization from time to time keeping in view the emerging scenario of spectrum availability, optimal use of spectrum, requirements of market, competition and other interest of public. The WLL frequency shall be awarded to the FSPs requiring the same, based on the payment of an additional one time fee over and above the FSP entry fee. The basis for determining the entry fee and the basis for assigning WLL frequency shall be recommended by the TRAI. All FSP operators utilizing WLL shall pay a licence fee in the form of a revenue-share for spectrum utilization. This percentage of revenue share shall be over and above the percentage payable for the FSP licence. It is proposed that the appropriate level of entry fee and percentage of revenue share for WLL for different service areas of operation will be recommended by TRAI in a time-bound manner, keeping in view the objectives of the New Telecom Policy.”
18. It was therefore, argued that all the elements of limited mobility, and more-specifically, allocation of frequency spectrums, payment of additional licence fees and spectrum charges etc. were clearly envisaged in NTP 1999 as a part of service to be provided by FSPs. The learned counsels also drew attention to paragraph 1.3 of NTP 1999 which stated, inter alia, in clear terms that the emerging convergence of markets and technologies is “blurring the difference between different conduit systems such as wireline and wireless” and that this now “allows operators to use their facilities to deliver some services reserved for other operators, necessitating a relook into the existing policy framework”. In addition, it was argued that even if it is assumed without admitting that NTP 1999 does not permit such a service, due note has to be taken of the fact that NTP is a non-statutory instrument and therefore, can not create any legal right in favour of anyone. It was stressed that NTP 1999 could not, and should not, be construed as a detailed or exhaustive regulatory document that intends to prohibit anything which is not expressly stated therein. On the other hand, NTP 1999 is basically a dynamic document outlining the framework for development of telecommunication industry in which the emergence of convergence of both market and technologies is clearly foreseen. The learned counsels of the Union of India and other respondents also urged that a Policy document should not be construed as an instrument to freeze development in a fast-changing scenario, particularly in a sunrise area like telecommunication and the Policy makers never intended it to be so.
19. Learned Solicitor General also averred that no change is required in the NTP which permits the service in question. The Government has wide powers to change policy and no formalities are required to be followed in order to bring about or give effect to such policy changes. It was also submitted that the Government have express powers to change the terms and conditions of the licence. He further explained that the Government's changed stance after 17th September, 1999 should be seen in the context of suggestions emanating from the industry and issues delineated for consideration in the TRAI Consultation Paper dated 12.06.2000 and that is why Government referred the matter to the TRAI on 9th October, 2000 inviting its recommendations on the matter which related to utilization of existing licence and for clarifying the terms permitting the proposed service. The question of Government's referring the matter back for the recommendation of TRAI while it was allegedly referred for the first time, in the view of the Counsel for the Union of India was not a correct statement, since the issue referred back was in fact raised by TRAI itself in its Consultation Paper on 12.06.2000 which had not been covered fully in their recommendation dated 31.08.2000 Hence, the Government made a request for reconsideration. It was specifically denied that the permission to offer WLL with limited mobility was an arbitrary, unreasonable and unjust decision on the part of the Government in view of the fact that the subject has gone through various stages of consideration including wide-ranging consultations held by TRAI and issue of necessary guidelines permitting use of handheld sets by basic service operators in respect of WLL service and the required amendment to their licences to this effect. It was also looked into later by a high-powered Group on Telecom — IT constituted by the Prime Minister.
20. The Counsel for ABTO in their written submission contended that NTP-1999 is not the licence but a policy and provides an enabling framework. The policy does not prohibit wireless service being provided by the BSOs and recognizes WLL service. The fact that NTP-1999 combines different service specific operators under one common head of Access Provider show that, the policy does not mandate service specific water-tight compartment. It was also contended that WLL is a part of basic licence from the very inception in 1996 and therefore, BSOs have installed wireless equipment since the very inception immediately after grant of licence in 1997-98 without any objection from cellular mobile service providers. It was also stated that MTNL had been providing WLL(M) service since 1997 in its FSP licence.
21. The Counsel for Telecom Watchdog in his written submission also referred to NTP-1994 read with the basic service licence which expressly permitted WLL and did not prohibit WLL(M). Further, FSP licences under 1994 Policy expressly permitted WLL with Last Mile Connectivity and a specific frequency spectrum was earmarked. The Policy also stipulates wireless as preferred technology and the licences granted under NTP-1999 allow the basic service operators to provide WLL service. It was also contended that mobility in WLL was implicit and the Government has only regulated the existing position. On the question of the decision being arbitrary, unreasonable and unjust, it was stated that introduction of WLL(M) was in the interest of the consumer who would get the service at a much cheaper rate leading ultimately to increase in the teledensity. It was also submitted that argument of the Petitioners that there was shift in stand of the Government from 17th September, 1999 to 9th October, 2000 is erroneous. In this context, sequence of events was given indicating how the final decision to allow limited mobility service has passed through various stages of consideration. The sequence of events stated is as follows:—
(i) Start of WLL service by MTNL in 1998 as a part of its basic service licence,
(ii) COAI contention that mobility in WLL(M) to be confined to 100 meters (30th March, 1998),
(iii) DoT's prescription of tariffs on 7th April, 1999 in respect of WLL(M) service,
(iv) 17th September, 1999 letter from DoT to TRAI reiterating non-permission to basic operators to provide cellular mobile service,
(v) TRAI Consultation Paper of 12th June, 2000 where question on WLL(M) was raised,
(vi) TRAI recommendation of 31st August, 2000 where it did not address WLL(M) issue fully; and
(vii) DoT's letter of 9th October, 2000 seeking reconsideration of recommendation on the issue of WLL(M).
22. The Counsel for Reliance Infocomm submitted that the arguments given by Petitioners' Counsel are completely fallacious as there were no pleadings of malafide in the petition or otherwise. The decision of Supreme Court in E.P Royappa v. State of Tamil Nadu and Another (AIR 1974, SC 555 Para 92) was also cited in this context wherein a clear principle has been laid down to the effect that no allegation of malafide can be made unless there is proof of malafide and the other side is given an opportunity to meet these allegations.
23. Our perusal of the NTP 1999 document indicates that the document which is non-statutory lays down a broad road-map for the development of various segments within the telecommunication sector; at the same time it clearly visualizes convergence of both markets and technologies necessitating realignment of the industry and a relook into the existing policy framework. A careful reading of the document suggests that the policy was intended to accelerate the process of development initiated through deregulation and liberalisation and not to put additional regulatory shackles where none existed presently. It would, therefore, not be correct to presume, as the Petitioners have done, that whatever is not expressly stated to be a permissible activity under NTP 1999 is prohibited thereunder. If that is so, no technological improvements or innovations which do not find express mention in the policy document can ever be introduced without again changing the policy formally. This assessment gets further strengthened by the following assertions in the NTP 1999:—
“……….in addition to some of the objectives of NTP 1994 not being fulfilled there has been far reaching developments world wide. Convergence of both markets and technologies is a reality that is forcing realignment of the industry………Separate licences have been issued in our country for basic, cellular, ISP, satellite and cable TV operators……… However, this convergence now allows operators to use their facilities to deliver some services reserved for others”.
We have taken note of the argument of the learned counsels of the Petitioners that if the NTP 1999 is so clear on the issue of limited mobility there would have been no need to refer the matter to the GOT-IT with a specific question as to whether NTP 1999 allows it. The learned Solicitor General, responding on behalf of India, pointed out that this reference was made specifically in view of the doubts raised by the CMSPs in this respect and because the Government wanted to set all the doubts at rest in an open and transparent manner.
24. From the averments made from the side of Petitioners as well as respondents and the inspection of relevant records of DoT, it is observed that till August, 2000 it has been the consistent stand of the Government that mobile handset shall not be provided to the customer for use in WLL mobile service. This is clear from the letter issued to M/s Tata Teleservices Ltd. (Basic Service Provider in Andhra Pradesh Service area) on January 8, 1999 and letter issued on August 3, 2000 to M/s ECL Telecommunication Ltd. (Basic Service Provider for Punjab Service area) while approving their commercial code for provision of basic telecom services. Shyam Telelink, another Basic Service Provider for Rajasthan service area had included non-use of handheld sets for WLL services in its commercial code, which was submitted to DoT for approval on 16th February, 2000. M/s Bharti Telenet, licensee for Madhya Pradesh service area was also asked by DoT in their letter dated 2nd February, 1999 not to provide handheld sets to customers for its wireless in local loop service. It also appears from inspection of records that a decision was taken at the level of Chairman, Telecom Commission in September, 1999 that as per Clause 3.0 of Schedule B of Part I, Clause 1.7.2.2 of Schedule B of Part II and Clause 1.7.9.2 of the Licence Agreement for basic services, WLL may be used for local loop only and mobile service is not permitted. We have also taken note of the argument of the learned counsels of the Respondents that WLL(M) in fact was “embedded” in the licence of Basic Service Operators inasmuch as they are entitled to utilize wireless technologies in the local loop as one of the preferred technology. Wireless technology can certainly be engineered by altering the design of the Wireless Access Module (WAM) through enabled handsets to provide limited mobility within the local loop. However, a perusal of the tender document, licence and frequent clarifications issued by the Government before 25.01.2001 against the use of mobile handsets clearly indicates that wireless was primarily thought of at that point of time as a conduit of connectivity even though its capabilities to provide limited mobility through suitably engineered technology were known.
We have carefully examined the contention of the learned counsels of the Petitioners that the decision taken by the Government on 25.01.2001 was arbitrary and inconsistent with the stand taken in this respect earlier. There is no doubt that the stand taken earlier by the Government till August, 2000 was decidedly against the provision of mobile handsets by the Basic Service Operators. However, it is also seen from the inspection of the relevant files of the Department of Telecommunications that the Department itself had issued a Tariff Circular on WLL Mobile Service on macro cell and micro cell architecture with effect from 01.05.1999 This was issued on 17.04.1999 primarily to facilitate MTNL which had already started providing WLL(M) services, using CDMA technology. The Cellular Operators Association of India (COAI) had protested against this on 17.04.1999 and 02.06.1999 TRAI had also written to the Government on 09.06.1999 and 27.08.1999 to clarify its stand in this respect. On 17.09.1999 DDG of DoT issued a clarificatory letter to TRAI in which it was stated categorically that provision of mobile services by private basic service operators is not permitted under NTP-1999. We were however considerably intrigued to find in our inspection of the departmental file that this authoritative pronouncement on NTP-1999 was not shown to the Minister-in-Charge and issued without his approval. Both according to the Transaction of Business Rules 1961, and the Government Resolution under which Telecom Commission was constituted, policy and allied issues could be finally decided only with the concurrence and/or approval of the Minister-in-Charge. This apart, a perusal of the file indicates that within the department there have been different views at different points of time on this issue and the letter dated 17.09.1999 issued by the Department of Telecommunications was issued without proper authority as it was issued without the approval of the Minister-in-Charge. It is not merely a technical nicety; it is also an essential administrative requirement in terms of the Transaction of Business Rules, 1961. To the extent therefore the Government.
THE GOVERNMENT OF INDIA (TRANSACTION OF BUSINESS) RULES
In exercise of the powers conferred by clause (3) of article 77 of the Constitution and in supersession of all previous rules and orders on the subject, the President hereby makes the following rules for the more convenient transaction of the business of the Government of India:—
1. Short Title. — These rules may be called the Government of India (Transaction of Business) Rules, 1961.
2. Definition. — In these rules, “department” means any of the Ministries, Departments, Secretaries and Offices specified in the First Schedule to the Government of India (Allocation of Business) Rules, 1961.
3. Disposal of Business by Ministries. — Subject to the provisions of these Rules in regard to consultation with other departments and submission of cases to the Prime Minister, the Cabinet and its Committees and the President, all business allotted to a department under the Government of India (Allocation of Business) Rules, 1961, shall be disposed of by, or under the general or special directions of, the Minister-in-charge.” has held, with appropriate authorization from the Minister-in-Charge, that provision of limited mobility by the Fixed Service Providers is within the ambits of NTP-1999, we see no arbitrariness or impropriety. The Group on Telecommunication & Information Technology (GOT-IT) constituted by the Prime Minister, which gave a full hearing to the Cellular Mobile Service Providers, also did not see any reason to differ from the views expressed by TRAI that provision of limited mobility by the Fixed Service Providers was not inconsistent with NTP-1999. We have already given our own reasons as to why a policy document dealing with a fast-changing technological area like telecommunication should not be put into a straitjacket of regimentation and regulation which permits only what is explicitly stated in the document and hence can only inhibit and not promote.
We have been somewhat amused by the statement made by the learned Counsel of M/s Bharti Telenet that his client had never any doubt about mobility, either limited or otherwise, being unavailable to the Fixed Service Providers in terms of their FSP licence and that is why they obtained a separate cellular mobile licence to provide mobile services. The question therefore arises as to why, in spite of this clarity of vision, they submitted their commercial code for approval to DoT which inter alia sought approval of mobile handsets under WLL platform. We asked this question which remained unanswered.
25. There was indeed a shift in the approach of the Government when it decided on 25.01.2001 to permit the Basic Service Operators to offer WLL(M) services. We have now to examine the issue as to whether this shift in approach was such that it could not be done without formally amending the National Telecom Policy. However, even before that we have to see as whether this shift was at all possible or permissible in terms of what is stated in the licence of Basic Service Operators and Cellular Mobile Service Operators. The learned counsel of the Petitioners contended that the fundamental basis underlying the tender issued in 1995 and the licence which was issued subsequently was that licences were service-specific and mobile service/voice would not be provided by the Basic Service Operators. Correspondingly, the Cellular Mobile Service Providers had full rights under their licence to provide cellular mobile services. Thus, the decision of the Government in altering the scope of service amounted to an infringement of the contractual rights of the CMSPs and constituted a serious breach of an obligation undertaken by the Government. It was stressed that once there is a contract, it cannot be altered during its validity period, excepting in the rarest of the rare cases and that is how the powers of the government to amend the terms and conditions of the licence (Article 13(ii) in CMSP Licence and Article 14(ii) in FSP Licence) have to be interpreted. It was also submitted that Cell Operators were given mobile business and if this were given to any other party then Article 14 of the Constitution would be attracted.
The Learned Solicitor General arguing this point referred to a decision of the London Court of Appeal in William Cory & Son. Ltd. v. City of London Corporation. It was held in that case as follows:—
“While it was an implied term of any contract that one party would not do anything to disable the other party from performing the contract, the implication of a term that the corporation would not make bye-laws of the nature of that now in dispute would impose an unwarrantable fetter on the corporation in the exercise of their statutory duties under the Public Health (London) Act, 1936, s. 84(1)(a); such a term would be ultra vires the corporation; and, therefore, the sealing of the bye-laws was not a breach of a valid term of the contract and did not entitle the contractors immediately to treat the contract as repudiated.”
In the same judgement it was further observed as follows:—
“In general, no doubt, it is true that a term is necessarily implied in any contract, the other terms of which do not repel the implication, that neither party shall prevent the other from performing it, and that a party so preventing the other is guilty of a breach, but an act cannot be a breach of a term of the contract, express or implied, (let alone a repudiation) unless the term in question is valid.”
He further submitted that the stand of the Petitioners that there is an implied term in their licence that their duopoly cannot be taken away is misplaced and contrary to the Migration Package. It was also submitted by him that no allegation of malafide or pre-determined mind has been made by the Petitioners in their petition and/or before the Group on Telecom — Information Technology (GOT-IT). He reiterated that the Petitioners' stand that the process followed at various stages for allowing limited mobility did not permit adequate participation is not well-founded as the Government moved in the matter only after receiving the well-considered recommendations of TRAI. He also pointed out that the Government's approach is to encourage new technology, competition for the good of the common man and if CDMA become an affordable valid technology, the same should be taken advantage of for public good and the march of technology should not be stopped.
26. The learned Solicitor General further pointed out that under the licence the Government has express powers to change the terms and conditions of the licence in public interest and that grounds as stated in Article 13(ii) of CMSP Licence and Article 14(ii) of FSP Licence and that several changes in such terms and conditions were made after the issue of licences, affecting both the Basic Service Operators as well as the Cellular Mobile Service Operators. Reference was made in this context to changes in the terms and conditions relating to licence fee (from fixed amount to a revenue-sharing regime), to shift from exclusive use of GSM technology in cellular Mobile Services to a technology-neutral policy, and to extend the terms of cellular mobile licence from 10 years to 20 years. There were other instances also. In January 1999, the licence of CMSPs was amended to permit them to provide service in any city in the district instead of the district headquarters, as originally stipulated in the licence. It was argued that all these changes in the terms of licence were effected to ensure that these keep pace with the fluctuating variables and that these were accepted by all as a legitimate exercise of the power of the licensor to amend the terms and conditions of the licence. It was also submitted by the learned Solicitor General that the NTP-1999 was laid on the table of both Houses of Parliament as the Parliament was in session and not because there was any statutory requirement to get it either approved or endorsed by the Parliament.
During the hearings the learned counsels of the Petitioners tried to draw certain inferences from the “sudden” shift in approach of the Government and the “lightning” speed with which the final decision was taken by the Government after the recommendations of the TRAI were received, the guidelines announced, and the permissions accorded. Without being specific, the suggestion was that the decision of the Government was motivated. We must say that we have also noted the extraordinary speed of the decision-making process in the last fortnight of January 2001; Government decisions usually follow a more relaxed, meandering path. However, we think that in order to establish mala fide one has to have more concrete and substantial evidence; it is not enough to raise mere doubts and suspicions. It is relevant here to refer to a Supreme Court judgment in E.P Royappa v. Union of India [AIR 1974 (SC) 555 Para 92] where it has been observed as follows:—
“92. Secondly, we must not also overlook that the burden of establishing mala fides is very heavy on the person who alleges it. The allegation of mala fides are often more easily made than proved, and the very seriousness of such allegation demands proof of a high order of credibility………..In this context it may be noted that top administrators are often required to do acts which affect others adversely but which are necessary in the execution of their duties. These acts may lend themselves to misconstruction and suspicion as to the bona fides of their author when the full facts and surrounding circumstances are not known. The court would therefore be slow to draw dubious inferences from incomplete facts placed before it by a party, particularly when the imputations are grave………”
We can not ignore the facts that the decision was preceded by a consultation with the Regulator, viz., TRAI and subsequently reaffirmed by a high-power Committee appointed by the Government, viz., GOT-IT which had given opportunity to all the parties to present their points of view. The Regulatory process followed by TRAI consisted of (a) issuance of a Consultation Paper on 02.11.2000, (b) receipt of comments and objections in writing, (c) a hearing process by Open House Discussions in the four Metros, (d) exchanges and discussions with telecommunication and members of the public and (f) final issuance of recommendations on 08.01.2001 It is also interesting to note that the Standing Committee on Information Technology of Parliament had also looked into this issue while submitting its report to Parliament on “limited mobility through WLL for Fixed Service Providers”. The entire report along with its proceedings were earlier submitted to the Tribunal by the Union of India. The Committee had extensive discussions with both the parties and had recommended that “if the extent of mobility under the two systems i.e GSM and CDMA is not identical and as long as there is noticeable difference in the scope of the two services and that the imbalance apprehended in the level playing field by the BSOs introducing the new service can be corrected by making some necessary policy changes, provision of limited mobility through WLL may help faster rollout of the network, increase teledensity and greatly benefit the consumers provided the system, as envisaged, operates fairly in the interest of consumers”. It is relevant to note that this all-party Committee also did not consider the basic decision of the Government to be perverse even though it recognized the need for correction of certain apprehended imbalances.
27. We have noted that under Article 13(ii) of the CMSP licence and Article 14(ii) of the Basic Service Operators' Licence, express powers to amend the terms and conditions of licence are available with the licensor and such powers have been exercised from time to time to even permit the licensees to offer, within their existing licence, services which earlier required separate licences. Thus the Basic Service Operators are now permitted to provide certain value-added services like Voice Mail and Audio Text Services and the Cellular Mobile Service Providers are permitted to provide services like SMS, e-mails etc. which earlier required separate licences. We consider that as long as this power to modify the terms and conditions of the licence is exercised in terms of the stated considerations in the enabling clause, viz., “in the interests of the general public or for the proper conduct of telegraphs or for security considerations and reasons”, there is no bar on exercise of such power. And we have had no hard evidence to believe that the impugned shift in approach by the Government in regard to limited mobility is against public interest. Was it necessary for the Government to formally change the National Telecom Policy before giving effect to this shift in approach? Speaking from hindsight one might say that the language of the Policy document could have been more clear and explicit; but there does not appear to be any case to conclude that the document expressly prohibits limited mobility to be provided by Basic Service Operators, and that therefore it was necessary to formally change or amend the policy before taking the impugned decision.
28. It is also relevant to consider as to whether it is necessary to put in a policy document, all the future ramifications of a particular technology which in the first place would be difficult to assume and lay down in precise terms, since by its very nature a policy document sets forth the objectives and targets to be achieved as also the general direction in which developments in a particular sector should proceed in future. In this view of the matter, not allowing WLL with limited mobility purely on the ground that there is no mention of the term “limited mobility” in the policy document or in the Licence Agreement for basic service telephone operators would not be perceived as correct. What has to be seen is whether WLL itself is a part of basic service or cellular service and if it is a part of the basic service as it is in this case, the limited mobility has to be viewed as an offshoot of WLL service as the features of limited mobile service based on WLL and Cellular Mobile Service have been kept distinct. We have discussed in detail the distinct features of these two services later in our order. We also are of the view that WLL(M) service will subserve the objectives of the Telecom Policy leading to increase in tele-density and protection of consumer interest. Hence, we maintain the validity of WLL(M) service both in terms of Licence Agreement and NTP-1999 as well as with reference to the provisions contained in the TRAI Act, 1997.
29. The third issue identified by Justice G.B Pattnaik, CJ is that the Government's action to permit WLL with limited mobility is arbitrary, unreasonable and unjust.
It is true that till August 3, 2000 the consistent stand of the Government has been that the basic telephone operators would not be allowed to offer use of handheld instruments but then the question is how this decision subsequently underwent a change? Here, it is to be noted that this issue, namely, Mobile Wireless Access, was raised in TRAI Consultation Paper of 12th June, 2000 even though, the DoT had sought its recommendations in its letter of 23rd April, 1999 with a specific reference to the following:—
(i) Number of private service providers in a circle besides DTS;
(ii) Selection criteria;
(iii) Licence fee structure; and
(iv) Other facets of licence conditions.
30. Another reference dated 12.07.1999 from the DoT was also received by TRAI seeking similar recommendations in regard to licence fee arrangement for migration of the existing operators of Cellular Metros, cellular Circles and Basic Services to NTP-1999 regime. The TRAI in its recommendations dated 31.08.2000 in response to DoT's references in April 99 and July 99 among other things stipulate wireless as the preferred technology for subscriber loop. The recommendations further stated that the employment of this technology would appear to be inescapable if quick roll out and connection on demand in congested areas is to be given as per TRAI's Quality of Service Guidelines. It had further observed that experience has shown that the right of way is also a limited resource as Highway/Environmental Authorities do not permit repeated diggings along the Highways/vacant land with forestation. The Confederation of Indian Industry (CII), Association of Basic Telecom Operators (ABTO) and ASSOCHAM had also proposed full mobility for FSPs within the service area but this was opposed by Cellular Operators Association of India (COAI) indicating that this will be against the level playing field as the Cellular Operators had paid large amount of entry fee and are also paying spectrum charges. The Government also felt that the two services, namely, Cellular Mobile Service as well as WLL Service are qualitatively different in as much as they operate on different frequency band and the fact that both the basic service operators as well as cellular service operators had agreed to operate in multipoly regime, the use of handheld set in WLL service may be permitted only in the local area i.e Short Distance Charging Area. The services on WLL platform implied that the numbering plan of the local area is to be followed and Interbase Station Controller/Manager Authentication would not be permitted. This also implied that basic service operators would not be allocated frequency from GSM band. A view was taken that this will not only help in faster roll out but would also be less expensive as the cost of a handheld WLL instrument was estimated at Rs. 6,000/- against the cost of about Rs. 15,000/- for instrument for fixed wireless station. All these facts were placed before the full Telecom Commission which considered this matter in its meeting held on 21st September, 2000 and there was a general consensus in regard to lifting of bar in use of the handheld instrument in the network of basic service operators. But this consensus in the meeting was for permission only in local area i.e SDCA subject to conformance to the numbering plan of the local area and not permitting Interbase Station Controller/Manager Authentication as also not allowing frequency from GSM band to basic service operator. The final recommendation of the full Telecom Commission based on the consensus was that the matter may be referred to TRAI. These recommendations of Telecom Commission were considered in the DoT and the suitability of WLL technology for faster roll out at lower cost and allowing mobility in the service area was emphasized. The issue of level playing field was also focussed which could be ensured by providing for payment of additional one time fee over and above the entry fee paid by the fixed service provider and payment of licence fee in the form of revenue share by the fixed service providers utilizing the spectrum which will be over and above the percentage payable for the fixed service licences. TRAI was thereafter requested on 09.10.2000 to give their reconsidered opinion on various concerned issues and on the subject meant for faster roll out including permission for use of handheld instrument to basic service operators within the service area. TRAI was requested to consider and make recommendations in respect of scope of area of handheld subscribers terminals under wireless access system operations, the basis for assigning WLL frequency and the amount of entry fee and spectrum charges as a percentage of revenue to be charged from the basic service operators for extending the above facility in respect of existing as well as future basic service licences. The TRAI gave its recommendations on issues relating to limited mobility through wireless in local loop in the access network by basic service provider on 8th January, 2001. TRAI has stated that for formulation of its recommendations on the issue, it completed a process of public consultations to ensure transparency and due consultation in its decision making process. This process included preparation of a Consultation Paper wherein issues were raised on which inputs were solicited from stakeholders. In addition to the Open House discussions, TRAI also had meetings with a number of renowned telecommunications professionals, experts and others and inputs received from these sources were duly considered by the Authority before finalizing its recommendations. The TRAI's extensive recommendations cover a number of related aspects, namely, whether limited mobility should be provided through WLL, the extent of such mobility, tariffs for WLL with limited mobility, allocation of and charge for frequency spectrum, and various other aspects pertaining to level playing field and mitigation of likely adverse effects for Cellular Mobile Service Operators.
31. On the question of whether mobility in WLL should be permitted, the TRAI's general observation was that there is the more basic issue of restricting the consumers from a facility which otherwise, available technology as well as economic consideration permit. There is no reason to deny a facility as long as the likely adverse impact on level playing field is kept in view and ways can be found to mitigate these. TRAI also observed that according to the figures available from the DoT the cost of a WLL handset works out to around Rs. 6,000/- while cost of a fixed wireless access telephone works out to Rs. 15,000/- and therefore, on cost considerations also permitting the use of mobile handset would appear to be in the interest of both the operators and subscribers. TRAI also addressed the validity of the arguments against permitting WLL mobility. It held that as long as there is a significant difference in the scope of the services in terms of coverage and facility, such as seamless roaming, nationally and internationally as well as a large number of tele and supplementary services which the GSM is capable of offering whereas the basic is not, the quality and scope of service provided by the Cellular Mobile Service Operators will continue to be different and they will be able to command a premium on their services in comparison to the basic service operators. The TRAI also held that as long as the extent of WLL mobility is not comparable with that of mobility and roaming enjoyed by mobile subscribers of GSM networks and their apprehensions that they may be priced out of the market are exaggerated. While in the short run, there would be some loss of revenue for the CMSOs but in the longer run the effect will largely be mitigated, as with the reduced tariffs the consumer base would expand faster. On the question that permitting WLL will amount to violation of the cellular mobile service licence terms, TRAI noted that with the acceptance of migration to NTP-1999, they have accepted that their markets will no longer be protected in terms of their licences. But it will have to be ensured that increased competition is generated without making the level playing field uneven. On the question of reservations expressed on the limited supply of WLL services due to scarcity of available frequency spectrum for the purpose, TRAI held that for some time to begin with demand may outstrip supply of WLL services at some places, particularly in metros, but eventually market mechanism will prevail and an equilibrium between supply and demand will be reached. Finally, the TRAI concluded that in case the WLL mobility is not the same as that of cellular mobile service and provided that the disturbance expected to be created in the level playing field by the basic service operators introducing WLL(M) service can be evened out by making some necessary policy change, permitting WLL with mobility will be in the best interest of the consumers and the telecom services in the country.
32. On the question of extent of mobility, TRAI held that the circle-wise mobility sought by the basic service operators cannot be permitted on the WLL platform as it will pose a number of techno economic and regulatory problems. It held that extension of WLL mobility only upto the local area i.e SDCA will be the most optimal solution and serve interest of telecom growth in the country best.
33. On the question of the likely consequences of basic service operators being allowed WLL(M) service and their effect on the main stakeholders, the Authority observed that WLL with limited mobility will increase competition in both basic and cellular mobile segments and lead to a faster growth in teledensity as also confer considerable advantage to the customers. It however, recognized that the dominant basic operators could gain a further competitive edge by this policy change which would not be in keeping with the principle of providing a level playing field for all competitors and therefore, steps will have to be taken to even out undue advantages/disadvantages caused by the policy changes. It, therefore, recommended certain measures for maintaining a level playing field between the basic service and cellular mobile service operators. These measures included keeping the licence fees for both the basic service operators and cellular mobile service operators at a comparable level, i.e at 12% of the annual revenue in metros and Category ‘A’ circles, uniformity in the pricing and allotment of Spectrum between the WLL and Basic Operator and retention of 5% of revenue by the Cellular Operators for covering their cost of bad debts and collection charges.
34. On the question of entry fee for spectrum, the Authority recommended that the existing mode of frequency charge i.e what is applicable in case of Cellular Mobile Service Operators should also be applicable for WLL Mobile Service provided by basic service provider. It further recommended that the basis of charging WLL frequency spectrum in the CDMA band and the Cellular Mobile spectrum in the GSM band should be identical.
35. The recommendations of TRAI was considered by the full Telecom Commission on 24.01.2001 and approved. While approving the proposal it further observed that the reduction in licence fee for the cell operators i.e from 15% of annual gross revenue to 12% for ‘A’ category circle, 10% and 8% in respect of Category ‘B’ & ‘C’ circles respectively, placing them on par with basic service operators would ensure level playing field and also foster competition. The Commission also observed that the concession proposed by TRAI for cell operators will become operative from the date of issue/announcement of guidelines for issuance of licence for basic services. Thereafter on 25.01.2001, guidelines incorporating the issue relating to limited mobility including consequential amendments to the guidelines issued for cell operators on 5th January, 2001 was approved. Thus, the decision of the Government can not be regarded as sudden.
36. It is also relevant to refer to the Report of Group on Telecom & IT Convergence which was set up under the Chairmanship of Finance Minister on the direction of Prime Minister. This Group was asked to submit its recommendation on the following:—
(a) Whether the New Telecom Policy 1999 permits “Limited Mobility” service to be offered by Fixed Service Providers.
(b) If it is permitted under NTP-99, how it can be introduced to be consistent with the principle of level playing field among different categories of operators with the objective of assured services at cheapest possible rates.
(c) If it is not permitted under NTP-99, how the policy can be suitably modified to facilitate limited mobility to ensure faster achievement of the targets for tele-density as well as rural and remote area telephony at cheaper and affordable rates.
37. The Group examined in depth the views of DoT as well as those of the cellular and basic service providers in the matter. It noted that under NTP-1999, Fixed Service Providers can provide all types of fixed services and that NTP- 1999 enabled use of WLL Access System by the Fixed Service Providers. The Group noted that wireless in local loop will greatly facilitate the roll out in rural area at affordable prices and even in urban areas where it is technically non-feasible to provide wireline services, wireless in local loop is the only option for quick roll out. It also noted that NTP-1999 recognizes that convergence allows operators to use their facilities to deliver some services reserved for other operators necessitating a re-look into the existing policy framework. The Group noted that the issue of offering limited mobility to FSP Operators was raised before the TRAI. It decided, keeping in view the purposive construction given by the TRAI of NTP-1999 permitting WLL technology, coupled with the desirability of encouraging a technology which holds the potential for providing affordable telecom services and increasing tele-density rapidly, that it was not necessary to reopen the issue of enabling limited mobility technology to the FSP operators. It further noted that where technology allows the expanded service to the advantage of consumers, especially in rural areas, the general approach should be to interpret policy so as to permit maximum competition keeping always in view the need for a level playing field. There indeed was a shift in approach on the part of the Government towards WLL service but it cannot be termed as arbitrary or unreasonable in view of the fact that it has gone through various stages of consideration with the intention that fruits of evolving technology should not be denied to the consumer which gives him one more option, particularly when this is also conducive for increasing tele-density and making service available at a more affordable tariff.
38. The finding of the Supreme Court in this respect, as recorded by Justice Pattnaik, CJ himself is as under:—
“……. when we examine the impugned order of the Tribunal in the anvil of different contentions raised by the eminent counsel appearing on both sides, we find that the Tribunal on consideration of the materials, came to the conclusion that the decision to allow WLL with limited mobility was taken after elaborate discussions and deliberations, which in fact is borne out by records we have already discussed. The Tribunal also further found that the object of NTP-1999 and the purpose behind switching over from duopoly to multipoly is to encourage competition and to increase the teledensity of the country and to provide service to common man on an affordable basis. According to the Tribunal, allowing WLL with limited mobility will be to render cheaper telephone service to the consumer, both in rural and urban areas. This finding also is borne out from the materials on record and it may not be possible for us to interfere with those findings with the limited power we have under Section 18 of the Act.”
We have also given serious consideration to the argument of the Petitioners that the entire area of mobility in the telecommunication sector belongs exclusively to the Cellular Mobile Operators and that entry into this area can be only through a licence issued as per procedure laid down under the statutory provisions. If this is indeed so, we do not understand as to how the Radio Paging Industry which is also admittedly a wireless-based mobile service is still licenced separately and how the Cellular Mobile Service Providers have been permitted to provide Short Messaging Services (SMS) without following the regulatory procedures of licensing as laid down under the TRAI Act. It is common knowledge that this single act has effectively wiped out the Radio-paging industry. This was however a technology-dictated decision which was welcomed by the consumers and questions of contractual obligations or statutory limitations were not allowed to stand in the way of the over-all interest of the people. In the instant case, the Government obtained the Regulator's recommendations which were based on a consultative process and took a decision thereafter and subjected it later to the scrutiny of a high-power body (GOT-IT). It was also separately looked into by an All-Party Standing Committee of Parliament. Hence, we hold that allowing WLL limited mobility is not against the spirit of NTP-1999 and in totality the decision of the Government in this regard to permit WLL with limited mobility cannot be viewed as arbitrary, unreasonable or unjust.
39. The fourth issue raised in the judgment of Justice G.B Patnaik, CJ is that TRAI's recommendations dated 08.01.2001 had stipulated two conditions which were not accepted by the Government in taking the impugned decision and hence the decision was vitiated.
On the question of non-compliance of two conditions stipulated by TRAI, it is necessary to bring out what these two conditions were as per the Petitioners. The Petitioners in his amended petition has drawn attention to the TRAI's observations stating that in case the WLL mobility is not the same as that of the cellular mobile service and provided that the disturbance expected to be created in the level playing field by the BSOs introducing this service can be evened out by making necessary policy changes, permitting WLL with mobility will be in the best interest of the consumer and the telecom services in the country. The Petitioners has further observed in the petition that the TRAI has qualified its recommendations for permitting WLL with mobility:—
(i) Provided that the WLL mobility is not the same as that of the Cellular Mobile Service and
(ii) Further, provided that disturbances expected to be created in the level playing field by the BSOs introducing this service can be evened out by making some necessary policy changes.
40. It has also been observed by the Petitioners in their petition that subsequent to the said recommendations dated 8th January, 2001 no authority or agency in India has at any stage, made any efforts to examine and determine whether the two mobile services are substitutable or not. In this context the 17th Report of the Parliamentary Standing Committee of the 13th Lok Sabha was referred which according to the Petitioners, emphasized and recommended that it was necessary to ensure that there is noticeable difference in the scope of the two services. It was further submitted that the GOT-IT has tacitly accepted that the two services are similar and for this reason it has recommended equalization and sharing ratio for both fixed service providers and cellular mobile service providers. In dealing with these two issues it is necessary to go into the features of the two services which would also provide an answer to the (vi) issue relating to substitutability of the two services flagged in the judgement of Justice G.B Pattnaik, CJ. The counsel for Telecom Watchdog in his written submission as well as the counsels for ABTO and Union of India in their averments have brought out the difference in the features of the two services which to put in a nutshell are as follows:—
(i) Cellular Mobile Service provides seamless roaming throughout the country or even internationally whereas mobility in WLL service is confined to SDCA and roaming nationally and internationally is prohibited;
(ii) Local numbering plan is followed in the case of WLL Service and hand over of subscriber from one SDCA to another is prohibited while it is not so in the case of Cellular Mobile Service.
(iii) The frequency spectrum earmarked for the two services are different.
41. The TRAI in its recommendations dated 8th January, 2001 has also observed that the two services are clearly distinct and different in terms of coverage facility such as seamless roaming (nationally and internationally) as well as large number of tele and supplementary networks which the GSM network is capable of offering whereas basic service is not. Hence the quality and scope of service provided by cellular mobile service operators will continue to be different. While recommending limited mobility in its recommendations dated 8th January, 2001, TRAI had stipulated that as long as the extent of mobility is not comparable with that of mobility and roaming enjoyed by mobile subscriber of GSM networks the apprehensions of the cellular mobile service operators that they may be priced out of the market are exaggerated.
42. TRAI had also held that in cellular mobile systems which are operational in a large number of telecom circles in the country, there is a Mobile Switching Centre (MSC) capable of extensive mobility, management/roaming function while the WLL systems are engineered differently to provide the so called “Last Mile” linkage with the existing exchange and they do not have an exchange namely, MSC as part of the WLL system. Keeping this essential difference in view and the intrinsic character of WLL, the TRAI recommended that basic service operator be allowed to offer WLL with mobility within the local area i.e SDCA.
43. On the question of WLL(M) service the Authority did not treat the provision of limited mobility as a service outside the ambit of basic service providers licence as it felt that that would amount to preventing consumers benefit from the fruits of technological progress. The Authority viewed WLL with mobility similar to a supplementary or value added service for basic service. It also concluded that there was no reason to reconsider the issue of entry fee of basic service providers particularly, because the purpose of entry fee was mainly to deter non-serious entry of service providers. It finally recommended that WLL with limited mobility should be provided as a part of basic service licence and the entry fee and percentage revenue share licence fee should not be altered and be as applicable to basic service as at present.
44. The TRAI also expressed the view that mobility even though limited is a value addition to the service available to the consumer and there has to be suitable price therefore and this price should be cost based otherwise this service too may become dependent on availability of subsidies. Visualizing that operation of limited mobility service by BSOs would have an adverse impact on the business of cellular service providers, TRAI had emphasized in its recommendations the need to give them some relief in the terms and conditions of their licences which included bringing on par revenue share as licence fee for the Cellular Mobile Service Operators with that of Basic Service Operators in Metros and category ‘A’ circles and providing for the basis of allotment and pricing in regard to spectrum usage charges the same for both the Basic Service Operators and Cellular Mobile Service Providers. TRAI also determined that the 5% of revenue passed on the to the Basic Service Providers be retained by Cellular Mobile Service Operators as their share to cover their cost of bad debt and collection charges.
45. It seems to us that the TRAI had in mind this essential difference between the two services when it recommended WLL with limited mobility within the local area for the basic service operators. We also recognize that to an ordinary subscriber in a SDCA who does not want any roaming outside the SDCA or any other supplementary services offered by CMSPs it would appear as if there is virtually no difference between WLL(M) services offered by Basic Service Operators and those offered by CMSPs without supplementary services, excepting one important difference — WLL(M) services are non-functional outside the SDCA even though the service area of the Basic Service Operator may comprise of several SDCAs. This disability is not there in respect of services provided by CMSPs which are available throughout the service area which may have several SDCAs. There are other important differences in terms of scope of service, quality, coverage, frequency band of operation, numbering plan, traffic routing plan etc. The roll-out obligations of the two services are also quite different. Cellular Operators are required to cover only 50% District Headquarters or any other town in lieu thereof while the Basic Service Operators are required to cover 80% of SDCAs individually and 20% jointly. The most crucial difference however is that the WLL(M) handset can not be authenticated except in the SDCA itself. It has been alleged by CMSPs that several basic service operators are flouting this restriction on mobility and that it is not possible to police this restriction. If this is indeed so, appropriate action would have to be taken by the Government to ensure that this does not happen; but that would be a different issue and we are separately looking into it. We however do not find that the two services have become substitutable in view of the substantial differences, as listed above, existing between them. In the ultimate analysis, as foreseen by NTP 1999, such service distinctions may become archaic and obsolete in the context of convergence of market and technologies and a prudent approach would be to facilitate this process rather than try to put restrictions.
46. Another argument advanced by the learned Counsels of the Petitioners was that the Government had not accepted a core pre-condition of the TRAI recommendation relating to prohibition on the use of Mobile Switching Centre by the Fixed Service Providers while providing WLL(M) services and since this was a key issue, this should have been sent back to TRAI for reconsideration in terms of the fifth proviso to Section 11(1). They drew attention to the following specific observations made in the recommendations of TRAI:
“Although both WLL systems and Mobile systems employ similar Air Interface and network infrastructure such as cells, there are significant differences between the two. While in Cellular Mobile systems, such as GSM based networks which are operational in a large number of telecom circles in the country, there is a mobile exchange called mobile switching center (MSC) capable of extensive mobility management/roaming function, the WLL systems are engineered essentially to provide the so-called ‘last mile’ linkage with the existing exchange, and these do not have an exchange, viz., mobile switching center as part of the WLL system. Considering this essential difference and also the intrinsic characteristics of WLL as indicated by the nomenclature itself, i.e, ‘local loop’, the TRAI is of the view that extension of WLL mobility only upto the local, i.e, SDCA will be the most optimal solution and serve interest of telecom growth in the country best. Accordingly, the Authority recommends that the Basic Service Operator(BSO) be allowed to offer WLL with mobility withint the local area, i.e, Short Distance Charging Area(SDCA)”.
Quite apart from the fact that this issue viz., use of MSC by WLL(M) Operators is the subject matter of another challenge by the CMSPs which is already before us for consideration, we do not find any express permission to the use of MSC architecture by FSPs in the guidelines issued by the Government on 25.01.2001
47. The question of last mile linkage in the context of WLL Service also came up during the course of arguments. The Counsel for the Petitioners submitted that the ‘last mile’ connectivity is required to provide connectivity in the local loop which means physical connection from the subscriber's premises to the carrier's point of presence. He further explained that all connectivity in the case of fixed telephones was through cable wire, CO-AXIAL Cable or optic fibre and the policy allowed a wireless connection for the last mile to get over the difficulties experienced in providing a wired connection in the ‘last mile’.
48. In the written submission made on behalf of appellant before the Hon'ble Supreme Court of India a reference has been made on the ‘Last Mile’ question. It has been stated therein that the last mile connectivity is the need to provide connectivity in the local loop which has been defined in Newton's Telecom Dictionary as the physical connection from the subscriber's premises to the carrier's point of presence. It has further been averred that normally all connectivity in the case of fixed telephone was through copper wire, Co-axial cable or optic fibre and in order to get over the difficulties experienced because of terrain or congestion in providing wired connection in the ‘last mile’, the policy allowed a wireless connection in the last mile. This written submission further mentions that the Petitioners did not object to the use of WLL for the last mile connectivity by FSP and their main objection is to WLL with limited mobility because this is a service which is virtually indistinguishable from cellular service.
49. The Licence Agreement for basic service in Clause 1.7.2.2 (v) also mentions as follows:—
“For subscriber loop (local loop), optical fiber and wireless are the preferred technologies. Copper cable technology shall no be permitted, except over the last 500 meters of the loop. In exceptional circumstances in rural telephone systems where the penetration of DoT network is marginal, the LICENSEE may be permitted to lay copper cables.”
50. A Union of India hand-out on ‘last mile was also submitted which reads as follows:—
“Last Mile” is a notional term, which has also been used figuratively to refer to the connection between the Subscriber Equipment and the Telephone Exchange. It does not mean a “physical one mile”. Historically, Telephone Exchanges had limited capacity. They could manage only 5,000 to 10,000 Subscriber per Exchange. In case the number of Subscriber grew, another Exchange was opened some kms away. The second historical reason was that earlier, the Subscribers were connected to Exchange through a copper wire. This copper wire carried telegraph signals efficiently over a distance not exceeding 5 kms. In case of distance beyond 5 kms. there would be disturbance in the signal and quality of voice calls would get distorted. However, with modern technology, Exchange capacities have now grown tremendously and one Mega Exchange can serve numerous Subscriber eliminating the need to establish mini-exchanges every few kms. Secondly, with the deployment of Wireless technologies, the Telephone Operators are not constrained by the length of physical cables. Thus, the “Last Mile” could stretch upto 30 to 50 kms. depending on the strength of the wireless transmission signals. The concept of “Last Mile” would, therefore, seem wholly notional. It is not to be taken literally. The strenuous attempt to apply this term literally to WLL(M) operation is clearly misplaced.
Note: The term “Last Mile” does not seem to appear in the Basic Service Operators License. The term used in clause 1.7.2.2(v) is Subscriber Loop (or Local Loop/Area).”
51. From the Newton's Telecom Dictionary, the following extract on last mile was submitted which reads as follows:—
“Last Mile Not to be taken literally. “Last Mile” is an imprecise term that typically means the link — usually twisted paid — between an end-user and the telephone company central office — local, long distance or Internet. Of course, it doesn't mean a “mile”, since that “mile” could be less than a mile or several miles. The term has entered the language referring to the problems of your communications making it that last mile. Often that last mile runs over old, limited bandwidth copper wire that has been in the ground for eons and is supplied by a sleepy phone company who doesn't have any competition and not much incentive to perform and hasn't improved the quality of the cable in the loop. The vast majority of local loops are less than 12,000 feet in length — a little over two miles. Generally provisioned with twisted-paid cable plant intended to support voice-grade analog service, the ‘last mile’ is the source of much difficulty for high-speed data services.”
52. The Counsel for ABTO submitted that it is incorrect to suggest that WLL phone should be limited to about 100 meters (last mile) as the term ‘last mile’ is a figurative term that does not mean literally one mile but it is the distance between the exchange and the subscriber and with the advent of new modern exchanges and widespread use of the wireless, the last mile can easily be stretched to 40-50 miles. He also referred to ITU's World Communication Day write-up which states “while not strictly mobile, they are able to offer use of limited amount of mobility within a range of a base station: which range upto 50 kilometers if they have mobile handset making them a potentially useful local mobile technologies for smaller communities.” The TRAI in its recommendation dated 8th January, 2001 while discussing the extent of mobility has also observed as follows:—
“……looking at the issue from the charging angle also, considering that the BSOs have offered to provide WLL mobile service at the same tariff as that for local fixed service, the scope of the WLL service would need to be limited to that of the local area only. Looked at from purely legal angle any “local loop” service has to be within the limits of the local areas and NTP- 1999 has discussed WLL in the context of the last mile connectively which literally means the local areas or the SDCA”.
Thus, TRAI which is an expert body has enunciated the concept of last mile as co-terminus with local area. Read with the ITU write-up, this broad interpretation of the term ‘last mile’ given by TRAI seems to us to be logical and rational.
53. We shall now go into the (v) issue relating to level playing field raised in the judgment of Justice Pattnaik, CJ.
On the question of level playing field, extensive arguments were given by the counsels for the Petitioners and respondents who also made written submissions. The Counsel for the Petitioners in their arguments and written submission submitted that it was totally wrong to restrict this issue to sops and monetary compensations. He submitted that the issues are about rights and the very basis of inviting foreign investments. In this context a reference was made to NTP-1999 which according to him deals with this concept at three specific places. The first point that he referred to was the Statement of Objectives in the NTP-1999 which reads as follows:
“Transform in a time bound manner to a greater competitive environment in both urban and rural areas providing equal opportunities and level playing field for all players.
The next he referred Section 3.1.1 of NTP-1999 where it is stated as follows:—
“In order to ensure a level playing field between different service providers in similar situations, licence fee would be payable by DoT also.”
54. A mention of this concept in Section 3.1.3 of NTP-1999 was also referred to where it says “accordingly in case the above two way service communications are also to be provided by CSPs utilizing their network, they would also be required to obtain an FSP licence and be bound by the licence conditions of the FSPs with a view to ensure level playing field”. Hence, the view expressed by the counsel for Petitioners was that the emphasis in NTP-1999 is on the licencing aspect and level playing field both in terms of procedure and on the aspect of non-discriminatory terms and conditions. The written submission of the counsel of the Petitioners goes on further explaining the concept and its states that NTP-1999 recognizes both the onset of convergence as well as the ability to use common infrastructure for delivering multiple service through upgradation or otherwise and still emphasizes the need for having separate licences. It has been further added that the respondents suggestions to ensure a level playing field by realigning commercial terms alone would be a travesty since it would be virtually impossible to equate fixed line with mobile. Hence any attempt to address level playing field by tinkering with commercial terms (including entry fee differentiation) alone without passing the test of legality, permissibility, statutory compliance and in the face of clear allegation of pre-determined mind and extraneous consideration would render the entire dispute resolution nugatory and futile.
55. The learned counsels of the Petitioners submitted the following arguments to substantiate their point that the level playing field was disturbed in favour of the Basic Service Operators:
(a) Existing Cellular Operators have paid over Rs. 7300 crores as entry fee for CMSP licences. Even in the case of the 4th cellular licence, the entry fee is over Rs. 1633 crores. In contrast, the Basic Service Operators are now being permitted to offer mobile services without any additional entry fee;
(b) Entry into cellular service is limited and through an auction process, based on need and timing, availability of spectrum, etc. In contrast, the Basic Service Operators are allowed open and unlimited entry into fixed and consequently limited mobility services;
(c) Such unlimited entry of Basic Service Operators into the field of mobile services would create pressure in the availability of spectrum and bring in more than 4 operators in any service area;
(d) WLL(M) operators are allocated 5 MHz of CDMA spectrum which is more efficient thatn 4.4 MHz of GSM spectrum allocated to CMSPs, but both operators are charged 2% of the adjusted gross revenue for usage of different amounts of spectrum having different traffic potential;
(e) The Points of Interconnect available to CMSPs are only at Level I and Level II TAX in 322 LDCAs whereas the Basic Service Operators have Points of Interconnect at all the 2648 SDCAs.
(f) A cellular subscriber has to pay an additional Rs. 1.20 as access charges for using a PSTN network for a mobile to PSTN call, whereas the WLL(M) subscriber does not pay any access charges for use of PSTN network; and
(g) The service area classifications are different for CMSPs and Basic Service Operators which permits the latter to offer cheaper rates to WLL(M) subscribers by using their own intra-circle network for carriage of such calls.
56. In response, the learned counsels of the Respondents submitted as under:—
(a) The licence fee paid upto the date of migration as per the Migration Package offered by the Government, i.e, upto 01.08.1999 was treated as Entry Fee and this cut-off date was common for both Basic and Cellular Service Providers. The Basic Service Licences were signed in 1997-98 whereas the cellular licences were mostly signed around December 1995. Quite naturally the Cellular Licensees paid licence fee under fixed licence fee regime for a longer period than the Basic Service Licensees upto the date of migration, i.e, 01.08.1999 Apart from that, Cellular Mobile Licences fetched much higher bids in the tenders floated as a premier and as-yet-uncovered segment was being thrown open for the first time. However, no separate entry fee was charged from cellular operators for assigning any frequency. The figure of Rs. 7300 crores paid by the Cellular Operators was also contested. It was stated that the Cellular Operators (comprising of 42 licensees) paid a total amount of Rs. 5841.87 crores upto the end of July 1999 for a period of 3 years, i.e, from the beginning of their operation till the date of migration which works out to roughly about Rs. 43 crores of Entry Fee/Licence Fee per licence per year. As against that, the Basic Service Operators (who were only 6 in number) paid Rs. 1151.31 crores upto the end of July 1999 for a period of 1.33 years, i.e, from the beginning of their operation till the date of migration which worked out to about Rs. 139 crores per licence per year;
57. The Counsel for the Petitioners also submitted data showing actual amount of licence fee paid operator-wise from licence date to migration date i.e 01.08.1999, all India cellular subscriber figures in respect of migrated 1st and 2nd Cellular Mobile Service Providers and details of revenues from 01.08.1999 to 31.12.2002 earned by cellular mobile service providers as well as details of capital cost for set up of service. As per the data furnished it is seen that the actual total amount of licence fee paid from licence date to migration date including interest amounted to Rs. 6974.25 crores and the present value of total dues paid for migration has been shown as Rs. 13635.63 crores. Similarly, the details of revenue earned between 01.08.1999 to 31.12.2002 in respect of first and second cellular operators amounted to a total of Rs. 14295.08 crores. Similarly, the set up costs for first and second cellular operators in different service areas amounted to a total of Rs. 18194.34 Crores only and this, according to the Petitioners, will become approximately Rs. 25894 Crores if accumulated losses upto 31.03.2002 is added. As per the data furnished in respect of subscriber base on all India basis for the migrated 1st and 2nd Cellular Operators, in July, 1999 it was 1142924 which became 8503054 by December, 2002, a rise in the number of subscribers by 7360130.
58. The Counsel for the Petitioners in his written submission submitted that the gross revenue of cellular operators from 1st April, 2000 to 31st March, 2001 including Metros and Circles amounted to Rs. 3575.23 Crores while revenue earned from roaming during this period amounted to a total of Rs. 264.46 crores which works out to approximately 7% of total revenue. It was also submitted that revenues within home SDCA constitute 80% of total revenues of cellular operators.
59. However, this argument has been contested by the Counsel for ABTO who submitted that the data given by the Petitioners is only up 31.03.2001 whereas roaming revenue shows a sharp increase for the period thereafter. The ABTO however, maintained that the revenues within and outside of SDCA have not been shown and the Petitioners have treated revenues accruing outside the circles as roaming revenues.
60. Similar information was also obtained from ABTO and Reliance Infocomm. The data furnished by them shows that the 6 basic telecom operators had paid total amount of licence entry fee of Rs. 1128.84 crores upto 31.07.1999 Additionally, they paid a total amount of Rs. 3115 crores as entry fee including Performance Bank Guarantee (July/August, 2001). Further, licence fee (revenue share) including spectrum charges @ 2%, paid by the basic operators between 01.08.1999 to 31.12.2002 amounted to Rs. 121.18 Crores. Similarly, their revenue earning from licence date to 31.07.1999 (Migration) amounted to Rs. 12.84 crores and from 01.08.1999 to 31.12.2002 amounted to Rs. 1370.17 Crores. As regards set up costs the amount totalled Rs. 14966.30 Crores as on 31.12.2002
61. As regards subscriber base upto the date of Migration it was 1262 in respect of wireline and 8656 in respect of WLL making a total of 9918 subscribers. As on 31.12.2002 the number of wireline subscriber was 326135 and that of WLL subscriber 308188. As on 31.01.2003 the number of wireline subscriber went upto 338581 and that of WLL subscribers the figure was 329543. In respect of Reliance Telecom Ltd. and Reliance Infocomm Ltd. the number of wireline subscriber was 362197 and that of WLL subscriber was 322338 as on 25th March, 2003.
62. In the written submission on behalf of ABTO it has also been stated that 6 licences were signed in 1997 under NTP-1994 and now there are 31 licences given to provide basic service, namely;
(i)
Bharti Telenet Ltd.
(5 licences)
(ii)
HFCL Infotel Ltd.
(1 licence)
(iii)
Hughes Tele.com (I) Ltd.
(1 licence)
[acquired by Tata Teleservices (Maharashtra) Ltd.]
(iv)
Reliance Telecom Ltd.
(1 licence)
(v)
Reliance Infocomm Ltd.
(17 licences)
(vi)
Shyam Telelink Ltd.
(1 licence)
(vii)
Tata Teleservices Ltd.
(5 licences)
ABTO have further submitted that investments including licence fee as on 27th May, 2003 stood at over Rs. 20,000 crores by these companies with an additional commitment of over Rs. 11,000 crores in the coming year. They have also submitted that subscriber base in respect of cellular service has gone up from 0.34 million in 1997 to 11.75 milliion in February, 2003. It has also been submitted that the cellular growth in metro circles has been of the order of 73% between March, 2002 to March, 2003. The corresponding growth rate during the same period was 104% in Category ‘A’, 125% in Category ‘B’ and 124% in Category ‘C’ circles which worked out to an all India figure of 97% growth during the same period.
63. From the data given above it is clear that there has been a phenomenal growth both in the number of cellular subscribers and WLL subscribers. It is also clear that the cell operators paid a much higher amount for getting the licence as compared to the basic service operators. It is also true that the cellular operators earned a much higher revenue than the basic operators during the same period. In respect of set up cost also the cellular operators invested a much higher amount than the basic service operators. Keeping in view the impact of WLL(M) service on the operation of cellular operators as also the recommendations of the TRAI in this regard, the Government reduced the licence fee in respect of cellular operators from 17% to 12% for metros and Category ‘A’ circles, 10% for Category ‘B’ circles and 8% for Category ‘C’ circles and brought the same on par with annual licence fee required to be paid by the basic service operators resulting in substantial benefit in monetary terms to Cellular Operators. They were also allowed reimbursement of 5% of access charges. Other reliefs given included permitting cellular operators also to deploy fixed telephone on their GSM networks, levying of same frequency spectrum charges for both the cellular operators and basic service operators, making available increased interconnection point at TAXI and TAX-II levels to cell operators and grant of permission to cellular operators to establish and operate mobile PCOs within their service area. These concessions, if translated in monetary terms would add to a substantial amount. PCO as a facility falls in the basic service stream and permitting cellular operators to provide mobile PCOs is expected to cause considerable dent in the PCO service run by the basic service operators. According to ABTO counsel, this had the effect of direct loss of over Rs. 1000 crores to all the BSOs. However, keeping in view their investment in procuring the licences and huge expenditure incurred in setting up the infrastructure as also expected fall in market share with the entry of WLL(M), we are not suggesting here that they have been fully compensated and level playing field has been ensured.
64. As a matter of fact the contention of the counsel for the Petitioners has been that ensuring a level playing field by re-aligning commercial terms alone would itself be a travesty. We have already examined in this order the validity of WLL(M) from the angle of NTP-1999, the Licence Agreement and with reference to the provisions of TRAI Act, 1997. We have come to the view on the basis of averments made and material on record as well as inspection of relevant documents that WLL(M) is a value addition to WLL service and as such should not be treated as a new service. However, since permission to allow limited mobility to WLL operators in the basic service stream is bound to disturb the level playing field and since the compensation/reliefs so far given are not considered enough to restore level playing field, we have to examine what further steps would be needed in the matter.
65. Shri Gopal Jain, counsel for Petitioners in his written submission has given a chart alleging discrimination of Cellular Mobile Service Operators vis-à-vis Fixed Service Providers. This chart is reproduced which according to him indicates the position of FSP vis-à-vis CMSP in regard to entry fee, Migration Package, interconnection, spectrum etc.
Entry Fee
FSP
CMSP
Free
9000 crores
Migration Package (6 Circles)
Benefit of Rs. 25,748 crores
Benefit of Rs. 4316 crores
Interconnection-COAI has been seeking equitable, cost-based non-discriminatory interconnection atleast since 1997.
Parity with WLL(M) has been sought since January, 2001 only pending the decision on the legality and permissibility of the service.
Sharing of Long Distance Revenues-Actioned in December 2001 pursuant to GoT(IT) recommendations but effective in end January 2002, a year after WLL(M) was introduced.
Equalization of Access Revenues
Parity in local call access charges was only introduced in the IUC regime in January 2003 well after the service was introduced.
Spectrum
Entry Fee for spectrum-FSPs have not paid an entry fee for spectrum.
In contrast CMSPs have paid huge entry fees for the right to use spectrum to offer mobile services.
Ability to provide basic telephones-Permission to offer basic services under terms of a CMSP licence is an empty and meaningless gesture as:
- Because of the differential and discriminatory terms of the CMSP & FSP licences, the prices under the cost-plus model of the CMSP licence would never be able to compete with the tariffs that could be offered by FSPs with their subsidy model.
- Spectrum available to CMSPs is inadequate/sub optimal to offer mobile services.
PCO's-Has no relevance to WLL(M)
_ Explicitly permitted in NTP-99
_ Rs. 1000 crores loss is totally fictional
_ As of date only 1 CMSP(Escotel) is offering mobile PCOs.
_ Escotel and 2 CMSPs who were offering Mobile PCOs in 2002-03 have revenues of Rs. 35 lacs from this service during that period.
Same Spectrum usage charges
Not a sop to CMSPs.
Limiting area of WLL(M)
Not sought by CMSPs
No roaming for WLL(M)
Not sought by CMSPs
66. The Counsel for ABTO consistently maintained that level playing field has already been ensured in the case of Cellular Mobile Service Operators and they indicated the status of benefits in various areas given to the cellular operators.
These are indicated as follows:—
1. Lowering of Licence FeesGranted:
(12%, 10% and 8% equally to both Basic and Cellular)
2. Sharing of Long Distance Revenues Granted: (5% EQUALLY to both WLL(M) and Cellular)
3. Equalization of Retention of Access Charges Granted: (5% EQUALLY to both WLL(M) and Cellular)
4. Same Spectrum Usage Fee Granted: (2% to both Basic and Cellular)
5. Ability to provide Basic Telephones also Granted:
Cellular Operators are permitted to provide fixed phones in their Licensed area of operations using their infrastructure.
6. Limiting Area of WLL Mobile Phones Granted: (Limited to SDCA only)
7. No Roaming for WLL Granted: Cellular has full worldwide Roaming.
8. PCO phones Granted:
Worth Rs. 1,000 Crores as per DoT.
9. Greater Points of Interconnection across the country Granted
10. Revised Interconnection Usage Charges based on cost determination under consideration of TRAI. (A separate Consultation Paper for all Telecom Operators issued by TRAI which is under consideration)
67. While considering the level playing field issue, it is necessary to keep in view the character and the features of the two services, namely, the Cellular and WLL(M), the obligation cast on these two categories of service providers, the area of their operation, their customer segment as well as their revenue earning potential. We have already discussed at great length the distinct features of these two categories of services. It is important to note here that WLL(M) operations are restricted to SDCA within a circle whereas the cellular service covers the entire circle. The cellular service providers obligation in the matter of roll out is limited to cover only 50% of the District headquarters in three years while in the case of WLL(M) service coverage of rural, semi-urban and urban areas in equal proportion is required to be ensured. Similarly, the cellular market is a protected market whereas there is no restriction on the nature of new operators in basic [WLL(M)] service. Even in the matter of spectrum allocation the cellular operators are allocated 10 MHz (Maximum) whereas the Basic Operators (WLL) are allocated 5 MHz(Maximum). Keeping these distinct features of the two categories of service in view it is equally important to correct the imbalance by ensuring level playing field. First and foremost it is important to ensure that mobility in the case of WLL(M) service remains restricted to SDCA and no hand-over from one SDCA to another is allowed under any circumstance. It should be possible to ensure this through application of appropriate software.
68. We have carefully appraised all the documents and arguments preferred and there is no doubt in our mind that entry of Basic Service Operators with Limited Mobility services has affected the Cellular Mobile Service Providers in an area where competition hitherto was limited. However, we have seen no patent illegality in the action of the Government and have also noted the various reliefs granted to the CMSPs by the Government in order to level the playing field conditions. The cheaper alternative offered by Limited Mobility Service, even though not exactly substituting all that fully mobile services can and do offer, has certainly introduced an unsettling element in the Cellular Mobile Industry, particularly in the Metro Cellular areas. Prices have crashed dramatically, incentives to retailers and consumers have multiplied, and the increasing competition has led to more price-cuts and offering of several supplementary and/or value-added services which will sooner or later have an impact on both growth and profitability. While in this bonanza the consumer is definitely the beneficiary, one needs to see as to whether the continuation of the aggressive price wars would ultimately benefit the industry and also the consumer. In this context, we have not found the reasons given by the TRAI for not recommending any additional entry fee for this service as convincing enough as this is an enormous value-added service over the fixed service which the Basic Service Operators have been providing. In the meanwhile, one cannot fail to notice the fact that the customer base of both the CMSPs and the Basic Service Operators offering WLL(M) has expanded enormously ever since the decision taken by the Government on 25.01.2001 Since it is a value addition to WLL service which has a definite impact on the playing field conditions, we feel that there is enough justification for imposing additional entry fee over and above what they are paying as required under the basic service licence agreement. Further basic service operators are presently entitled to allocation of frequency spectrum for WLL technologies for which they are required to pay under DoT letter dated 25th January, 2001 an additional revenue share of 2% of annual gross revenue earned from WLL subscribers as spectrum charge. Since, We have already noted that WLL(M) is a value addition to the WLL service for operation of which on a large scale there would be a need for additional spectrum we would suggest the Government may allocate additional spectrum for WLL(M) service. The cell operators are also paying 2% as spectrum usage charge. Hence, we are not suggesting any revision on the higher side of the spectrum charge presently being paid by WLL(M) service operators. However, there would be a case for levying additional spectrum charge for WLL(M) service over and above what is being paid at present if allocation of additional spectrum becomes a necessity for operation of this service on a large scale as also for improving the quality of service. The modality for determining additional entry fee may be examined and recommended by the Telecom Regulator (TRAI) by following a transparent process with due consultation with all the concerned stake-holders. The same method may be followed in case additional spectrum is made available. Further, some relief should be given to the cell operators in regard to the points of interconnection and whether these points should go beyond Level I and Level II TAX upto Tandem Exchange level may be considered by the TRAI. In regard to retention of 5% access charges which has been allowed to cellular operators there is a case for increasing this percentage to a reasonable level. Higher percentage in this regard could be recommended by the Telecom Regulator after due and comprehensive consideration of the issue in a transparent manner.
69. We now come to the last issue identified by Justice Pattnaik, CJ: “The decision of the Government not to charge any entry fee or spectrum allocation charges to Fixed Service Providers wishing to provide Limited Mobility and not to hold any competitive bidding was contrary to the recommendations of TRAI regarding grant to new Cellular Mobile Service Providers Licence”. We have already seen that both the Government and the TRAI considered Limited Mobility Service as a value-added service within the ambit of the service of Basic Service Operators and not as a fully mobile cellular service as offered by Cellular Mobile Service Providers. Thus the decision not to hold any competitive bidding is understandable. What is not so understandable is its decision not to charge any fees for the entirely new value-added service, even though both NTP 1999 as well as DoT's own reference to TRAI on 9th October 2000 envisaged levying of such a charge. NTP 1999 had observed: “The WLL frequency shall be awarded to the FSPs requiring the same, based on the payment of an additional one time fee over and above the FSP entry fee. The basis for determing the entry fee and the basis for assigning WLL frequency shall be recommended by the TRAI”. In its reference to TRAI dated 09.10.2000 the Government had also requested the TRAI to make recommendations “in respect of scope of area of hand-held subscriber terminals under Wireless Access System Operations, the basis for assigning WLL frequency and the amount of entry fee and spectrum charges as a percentage of revenue to be charged from the basic service operator for extending the above facility in respect of existing as well as future basic service licensees, so as to ensure a level playing field with the cellular operators.” This indicates that at that stage the Government was aware that some amount of leveling of playing field conditions by way of an imposition of fee was necessary before the introduction of hand-held terminal sets under the Wireless Access System Operations by the Basic Service Operators. TRAI's reasons for not recommending any additional fee or entry fee were as under:
(a) Since WLL with limited mobility would be basically a supplementary or value-added service to be provided by the Basic Service Operators who had already paid their entry fee at the time of migration, no further fee was necessary; and
(b) The purpose of Entry Fee is basically to deter non-serious entry of service providers.
We must record out disagreement with these reasons as we believe that this was one much-debated value-added service which merited imposition of a fee on several considerations. Keeping in view the enormity of value addition that WLL(M) Service will invest fixed service as also the imperatives of restoring level playing field, we have already made observations regarding justification for levying additional entry fee and additional spectrum charges in Para 68.
70. Besides, the seven issues flagged in the judgement of Justice G.B Pattnaik, CJ, issues relating to faster roll out and affordability in the context of WLL(M) Service were also raised. We have noted that the twin features of WLL(M) service that it will lead to faster roll out and also provide affordable service, were the important consideration for allowing WLL with limited mobility.
71. The objectives and targets spelt out in NTP-1999 also include making available ‘telephone on demand’ by the year 2002 and sustain it thereafter so as to achieve a teledensity of 7 by the year 2005 and 15 by the year 2010 as also increasing rural teledensity from the current level of 0.4 to 4 by the year 2010. As regarding affordability, the NTP-1999 focusses on increasing development of telecom in rural areas making it more affordable by suitable tariff structure and making rural communication mandatory for all fixed service providers.
72. TRAI while giving its recommendation on grant of licences to basic service operators in 15 vacant circles and migration of basic service operators in 6 circles from fixed licensee to revenue sharing has stipulated the following minimum pace of roll out:—
For 15 Vacant Circles
Phase
Time period for completion from effective date of licence agreement
Cumulative % of coverage in terms of Point of Presence to be achieved at SDCA level at the end of each phase
I
2 Years
15%
II
3 Years
40%
III
5 Years
80%
IV
7 Years
100%
For the existing 6 circles, the recommendations of TRAI in this respect were as under:—
Phase
Time Period for completion from effective date of Licence Agreement
Cumulative % of coverage in terms of Points of Presence to be achieved at SDCA level at the end of each phase
I
Upto 2 years
30
II
Upto 3 years
50
III
Upto 5 years
80
IV
Upto 7 years
100
The counsel for the Petitioners in his written submission has questioned performance of fixed service providers in this respect, particularly in regard to Village Public Telephones which has been very dismal. As instances it was stated in his written submission by Shri Gopal Jain, Counsel for the Petitioners that in 1998 Tata Teleservices had to provide 9635 VPTs. in Andhra Pradesh whereas they could provide only 1314 by 30.10.2002; similarly M/s Reliance Infocomm provided 502 VPTs. against a target of 8635, as on 30.04.2003 In their rebuttal written submission, M/s Reliance Infocomm however stated that they were granted their licences in July 2001 and that they were required to cover 372 SDCAs in all the licensed circles by July 2003. Out of this target they could achieve upto April 2003 coverage of 1574 SDCAs which is 63% of the total obligation.
73. It is no doubt true that the coverage in respect of village public telephone has been far from satisfactory. This, however, does not negate the advantages of WLL(M) service from the angle of faster roll out from the consumer's point of view, particularly, for providing connectivity to remote and distant locations including hilly and mountainous areas, rural areas where cost can be prohibitive for wireline and congested urban areas where digging is a problem. There is however, no denying the fact that there is a need for making more stringent provisions and effective monitoring to ensure that the obligation cast in this respect on the service providers is discharged properly.
74. On the question of affordability of service the counsel for Petitioners has submitted in his written submission that in the year 2001 the tariff was Rs. 1.20 for 3 minutes and now i.e in May, 2003 the tariff is Rs. 3.60 per minute, accounting for a 300% hike. In this context a chart has been submitted, showing what was promised in the year 2001 and what the consumer pays today, which is reproduced below:—
Rental
Cellular
WLL(M)
Fixed
WLL(M)
Promised (1)
Rs. 200 (as of July 2002)
Rs. 0.40
Rs. 0.40
Rs. 0.40
WLL(M)
Today (2)
Rs. 200
Rs. 1.20
Rs. 1.20
Rs. 1.20
Tariff has gone up from Rs. 1.20 for 3 minutes to Rs. 3.60 for 3 minutes in all cases.
(1) As specified in the TRAI recommendation of 8 January, 2001, Government's impugned decision of 25 January 2001, as TTO(22nd Amendment) 6 of 2002 by TRAI.
(2) Tata Indicom Entry Plan, as advertised the week of Saturday, 10 May 2003, in the Times of India (New Delhi edition).
Similarly, charts have been submitted in regard to the entry fee and showing minimum rental of WLL(M) vis-à-vis Cellular and alternate plan in this respect. The Charts in respect of two are reproduced below:—
Entry Plan: Minimum Rental
WLL(M) v. CELLULAR
Per Minute Tariff
Rental
Cellular
WLL(M)
Fixed
Cellular
Rs. 269
Day: Rs. 1.99
Day: Rs. 1.99
Day: Rs. 1.99
Night: Rs. 0.99
Night: Rs. 0.99
Night: Rs. 0.99
WLL(M)
Rs. 200
Rs. 1.20
Rs. 1.20
Rs. 1.20
Alternate Plan: Rental at Rs. 599
WLL(M) v. CELLULAR
Per Minute Tariff
Rental
Cellular
WLL(M)
Fixed
Cellular
Rs. 599
Rs. 0.50
Rs. 1.00
Rs. 1.00
WLL(M)
Rs. 599
Rs. 0.50
Rs. 0.50
Rs. 0.70
NOTE: Incoming Free in both cases
Source: IDEA Cellular and Tata Indicom (Delhi) tariff in May 2003.
75. The Counsel for Telecom Watchdog in its written submission has also stressed that there should not be any let or hindrance in operationalizing WLL(M) service as it is one of the more effective ways for increasing teledensity and providing cheap and affordable telephone service throughout the country. It has also been submitted that any dent in commercial and financial expectations of the service operators should not be a factor to decide merits of the service. It was further submitted that the rapid deployment of WLL service at a lower cost will lead to an increase in teledensity and thereby translating directly to achieving the targets of NTP-1999 which are availability of telephone on demand and affordable telephones for all.
76. The TRAI in its recommendations dated 8th January, 2001 had also stated that even though the WLL Service will offer limited mobility, it has to be taken as value addition to the service available to the consumer and there has to be a suitable price therefor which should be cost based.
77. The ABTO in its written submission has submitted that WLL(M) services are more affordable than cellular services. In this context a chart captioned ”WLL(M) More Affordable than Cellular” has been submitted which is reproduced below:—
Type of Service
WLL-M
CELLULAR
Seivice Provider
Tata Telesetvices (Tata Indicom)
Bhaiti Cellular (Airtel)
MTNL (Dolphin)
Plan
Basic 295
Freedom 349
Prepaid (Maqic)
Plan A (250)
Prepaid (Trump)
WLL(M) - WLL(M)
Re. 0.70p/ min
Cellular-Cellular
Rs. 1.75p/min
Rs. 2.40p/ min
Rs. 1.80p/min
Rs. 2.20p/ min
WLL(M) - Cellular
Re. 0.70p/ min
Cellular-WLL(M)
Rs. 1.99p/min
Rs. 2.80p/ min
Rs. 2.10p/min
Rs. 2.50p/min
WLL(M) - Fixed
Re 0.90p/ min
Cellular-Fixed
Rs. 1.99p/min
Rs. 2.80p/ min
Rs. 2.30p/ min
Rs. 2.70p/ min
ABTO in the course of argument has also submitted that the chart submitted by counsel for COAI shows standard tariff plan of WLL(M) service and the cheapest entry level plan of one CMSP. It was also submitted by the counsel for ABTO that due to competition, air-time rate for outgoing calls have come down from Rs. 16.80 per minutes (in 1994-95) to Rs. 2.40 per minutes (in October, 2002). This is also clear from the chart submitted by ABTO which is reproduced below:—
78. From the above it is clear that tariff of WLL(M) service is not as cheap as it was when the service was introduced. Nevertheless, it is more affordable than cellular service and gives an added advantage of handheld instrument to the consumer. It is self-evident that if the service is not affordable, no consumer will go for it. In this view of the matter, the Petitioners' argument that it is no longer as affordable as it used to be fails. It is the responsibility of the Telecom Regulator to fix appropriate tariff for services keeping in view the segment of consumer a particular service addresses itself as also keeping in view other established principles like tariff being related to the cost. Be that as it may, there is no denying the fact that WLL(M) is a cheaper and more affordable service and has the potential of substantially improving teledensity as well as better coverage of rural areas and congested urban areas as well as difficult terrain at a much lesser cost.
79. It is now necessary to take up for consideration those issues identified by Justice S.B Sinha where in his view this Tribunal failed to assign sufficient or cogent reasons and, in certain case no reasons, in support of its findings. These are as under:—
(a) Non-compliance with Section 11(1)(a)(i) & (ii);
(b) Non-compliance with the fifth proviso by the Authority in view of the divergence of opinion between recommendation dated 8th January 2001 and guidelines made by the Government of India on 25th January, 2001;
(c) The issue of substitutability of Cellular Mobile Service with WLL with limited mobility within the area of SDCA like Delhi, Kolkata etc., particularly in a case where the subscribers of cellular phone have not chosen to opt for the roaming facility;
(d) WLL with limited mobility with the existing service is a new service within the meaning of NTP-1999;
(e) Whether it is within the Policy or outside the policy, amounting to a change in the policy;
(f) Whether the conditions attached by the Authority and its recommendations dated 8th January, 2001 have been satisfied;
(g) “If a National Policy had been adopted by the Cabinet, having regarding to the provisions contained in Section 14 of the General Clauses Act, although a change in the policy would be permissible, but the procedure laid down therefore, were required to be followed. This aspect of the matter had also not been considered by the TDSAT;”
(h) “Before TDSAT, the appellants argued that the decision of the Central Government was arbitrary. The said question was also not answered;”
(i) “As regards the level playing field, the TDSAT did not refer to a large number of materials at all. It took a wrong decision that the appellants had conceded the power of the Central Government in the matter of change of policy and furthermore agreed thereto in the event, its offers are satisfied;”
(j) “It failed to notice that the requirement of increase in teledensity in rural areas was not in question. What was questioned was that encroachment by the FSPs in the area which is said to be within the exclusive privilege of the Cellular Operators having regard to the provision of the NTP-1999 and the terms and conditions of the licences issued to them. It also failed to arrive at any finding as to whether the concessions given to the Appellants were asked for by them or not and/or whether only because they received such concessions, they were estopped or precluded from raising the issues;”
(k) “The learned TDSAT further failed to take into consideration the question as to whether the terms of offer made to the appellants as regards to providing fixed services were similar to those offered to the fixed service providers or not. It merely held that the appellants can use latest technology including WLL with limited mobility as also the respondents without taking into consideration the materials to the effect that the letters of the respondents to the authorities for giving the same facilities fell on deaf ears. Furthermore, the issue relating to the grant of concessions to the appellants may be held to be redundant if the purported decision of the Central Government/or the recommendations of the authority were illegal and without jurisdiction.”
We now propose to deal with these issues ad seriatim.
80. As regards the issues at (a) and (b) in the earlier paragraph, we have earlier dealt with this question in paragraphs 8 to 12 above. We reiterate that there has been no violation of the provisions of Section 11(1)(a)(i) and (ii) along with the fifth proviso.
81. As regards (c) of Paragraph 79, we have already given our reasons as to why we do not consider the two services to be substitutable. As regards limited mobility services in cities like Delhi, Kolkata etc., we were informed that for the Cellular Mobile Service Providers in the 4 Metro cities of Mumbai, Delhi, Chennai and Kolkata the service area comprises of the entire city and certain other adjoining and contiguous areas. However, for basic service providers, Mumbai is broken into 3 SDCAs, Delhi into 4 SDCAs and Chennai into 3 SDCAs. Only Kolkata has 1 SDCA. Roaming applies to only services outside the circle. Therefore, subscribers of Cellular Mobile Services who do not opt for roaming would have to opt for long-distance calls if they wish to call up subscribers outside Mumbai, Delhi, Chennai and Kolkata service areas respectively. Their handsets would also be non-operational outside their respective service areas. In respect of Basic Service Subscribers availing of WLL(M) Services in Mumbai, Delhi and Chennai, their services would be restricted to the SDCA in which they are registered and even within the same city their handsets may be non-operational if they cross over to another SDCA. Only in Kolkata, the non-roaming CMSP subscribers, if they are not availing of any other supplementary or value-added service, could be considered to be somewhat similarly situated as WLL(M) subscribers. We do not, however, consider it to be reasonable or sufficient to conclude from this solitary example that both the services are fully substitutable.
82. As regards (d) of paragraph 79 we have already outlined our reasonings in Paras 8 to 11 as to why we consider WLL(M) more as a value-added service rather than a new service. No repetition seems to be necessary. It may be relevant however to note the following observations of the International Telecommunications Union recorded in a document issued on the occasion of the World Communication Day and filed before us by the Respondents:—
“WLL provides an alternative to the traditional way of connecting subscribers to the local exchange using copper wire………. While not strictly mobile, they are able to offer users a limited amount of mobility withint range of a base station — which can range upto 50 kilometers if they have mobile handsets — making them a potentially useful local mobile technology for smaller communities. Used essentially for basic telephony, WLL effectively uses radio signals to substitute for a the copper wire connection that links callers to the PSTN.”
This tends to support the view that WLL(M) service is basically an adjunct to the Basic Service provided by the Fixed Service Providers.
83. We have also dealt earlier in Paras 10-14 and 23, 27 and 28 about the issue raised in (e) of Para 79. For the reasons stated therein, our view is that WLL(M) can not be considered to be prohibited under NTP-1999 and that NTP 1999 had in fact broadly envisaged a scenario in which due to convergence of both market and technologies it would be possible for operators, licensed for different and separate services, “to use their facilities to deliver some services reserved for other operators, necessitating a relook into the existing policy framwork.”
84. In the issue mentioned at Para 79(f) a question has been raised to whether the conditions attached by the Authority and its recommendations dated 8th January, 2001 have been satisfied. We have dealt with this question earlier in our observations at Paras 39, 45-46 in detail and given our finding.
85. In view of the conclusion we have now reached that the provision of Limited Mobility by the Basic Service Operators is not in violation of NTP-1999 it is not necessary to discuss the issue raised in Paragraph 79(g).
86. As regards the issue listed in Paragraph 79(h), it has been dealt with earlier in our observations at Paras 29 to 38.
87. The issue in Paragraph 79(i) refer to non-consideration by the Tribunal a large number of materials presented by the parties to the dispute on the issue of level playing field in its earlier judgment. This has now been dealt with in Paras 53 to 68.
88. The issues raised at (j) of Para 79 require some discussion. One of the stated objective of NTP 1994 was “to achieve universal service covering all villages as early as possible”. Similarly the NTP 1999 had identified one of the goals as “increase rural teledensity from the current level of 0.4 to 4 by the year 2010 and provide reliable transmission media in all rural areas”. In making its reference to TRAI on 09.10.2000 regarding limited mobility, the Department of Telecommunications had underscored the need to fulfill the roll-out obligations by the service providers and had drawn attention to the fact that “Rural Communication is mandatory for Fixed Service Providers.” In making its recommendations to the Government on 08.01.2001, the TRAI had observed: “By the year 2010, the teledensity is targeted to reach 15% with the objective of rural teledensity at that time being 4%, increased from the current rural teledensity of approximately 0.6%.” The Standing Committee of Parliament on Information Technology (2001) (Thirteenth Lok Sabha) in its report on “Limited Mobility through WLL for Fixed Service Providers” presented to Lok Sabha on 08.03.2001 observed as under:
“51. The Committee specifically enquired whether the proposed limited mobility would benefit the rural areas and ultimately help increase the teledensity of the country. The Chairperson, TRAI replied that WLL limited mobility would be applicable to all SDCAs in the country, whether urban or rural (there are 2650 SDCAs in the country at present). He further stated that to achieve a teledensity of 15, there should be use of WLL technology without which faster roll-out would not at all be possible either in the city areas or in the SDCAs. He emphasized that in the rural areas if copper lines were to be laid for 10 to 12 KMs. for roll-out, it would never succeed.”
It was in this context the Tribunal had made the following observation in its judgment:—
“Taking an overall view of the case we are of the view that increasing teledensity of the country is an object which must be pursued with zeal and vigour. Nothing should be allowed to stand in the way of pursuing this object.”
What was stated in the Judgment of the Tribunal was basically to underscore the relevance and importance of teledensity as an object of the telecommunication policy.
89. It has been stated that ‘what was questioned was that encroachment by the FSPs in the area which is said to be within the exclusive privilege of the Cellular Operators having regard to NTP 1999 and the terms and conditions of the licences issued to them”. Quite apart from the fact that no exclusivity was attached to the licences of both the Fixed Service Providers and Cellular Mobile Service Operators (in fact the licences very categorically stated that these conferred only non-exclusive rights), we have already noted that the decision of the Government was taken as per procedures laid down by law and in terms of the broad policy guidelines available. Activities taken up by the Basic Service Operators after being permitted by the Government to do so can not, in our opinion, be considered as “encroachment” by any standard. We have already considered the question as to whether the terms and conditions of the licence, as indicated in the original licence, could be amended or not.
90. As regards the question as to whether the Cellular Mobile Service Operators had asked for those concessions which were given to them by the Government, we had occasion to see a document which was produced before us when the case had come before us the first time. This was the copy of a letter dated 25th September, 2000, bearing No. TVR/COAI/457 from the Cellular Operators Association of India addressed to the Chairman of Telecom Regulatory Authority of India. In that letter the COAI had argued that WLL(M) is a new service which is not envisaged under NTP-1999 and also not permitted to Basic Service Operators in terms of the tender/licence conditions and had warned the Government about the consequences of “an unwarranted fragmentation of the already limited mobile telephony market…..” However, thereafter the letter stated that if in spite of all these objections limited mobility services are to be introduced, “then this should be done only after open consultation with all stake holders. Further COAI believes that the CMSPs should not only be adequately compensated for a reduction in their market share but also be subject to level playing field conditions in all aspects, which would include:—
(i) Adjustment of excess entry fees paid by CMSPs (ii) Identical levels of revenue share licence fee.
(iii) Permission to offer basic services in the local loop — the mirror image of WLL Mobility.
(iv) Equitable and non-discriminatory terms of Interconnection.
(v) Direct Inter-circle connectivity to compensate for revenue losses due to market fragmentation.
Detailed submissions by COAI to the DoT on this issue are enclosed as Annexure I-IV for your kind consideration.”
This detailed submission of 25th September, 2000 was before the TRAI and the Government for consideration and hence it is clear that the subsequent reliefs granted by the Government in certain spheres like identical levels of revenue-share as licence fee and permission to offer basic services in the local loop were not unsolicited ones. Quite obviously this could not work as an estoppel to prevent the CMSPs from raising these issues again and they have been doing so from time to time.
91. We now come to the last issue flagged in Para 79(k): “Whether the terms of offer made to the appellants as regards to providing fixed services were similar to those offered to the fixed service providers or not. It merely held that the appellants can use latest technology including WLL with limited mobility as also the respondents without taking into consideration the materials to the effect that the letters of the respondents to the authorities for giving the same facilities fell on deaf ears. Furthermore, the issue relating to the grant of concessions to the appellants may be held to be redundant if the purported decision of the Central Government/or the recommendations of the authority were illegal and without jurisdiction.”
92. We have carefully perused the documents presented before us by the Petitioners and the Respondents to locate whether any “offer” was made by either the TRAI or the Government to CMSPs to provide fixed services and, if so, what were the terms and conditions of such offer; we have not been able to locate any. We have perused the guidelines issued by the Government on 25th January, 2001 in this respect, which are in the case records with us, and have seen the following relevant clauses:—
“18. Basic Service Operation shall be allowed to provide mobility to its subscriber with Wireless Access Systems limited within the local area, i.e, Short Distance Charging Area (SDCA) in which the subscriber is registered. While deploying such systems, the operator has to follow numbering plan of that Short Distance Charging Area (SDCA) and it should not be possible to authenticate and work with the subscriber terminal equipment in SDCAs other than in which it is registered. The system shall also be so engineered so as to ensure that hand over of subscriber does not taken place from one SDCA to another SDCA while communicating. Further the operator shall ensure that Radio Transmitters may be located and established at a distance of 10 Kms from the international border of India, and such radio transmitters will work in such a fashion that any signal or signals, emanating therefrom, fade out when nearing or about to cross international border and also become unusable within a reasonable distance across such border. Provided further that the fee/royalty for the use of spectrum and possession of wireless telegraphy equipment for point to point radio link shall be separately payable as per the details and prescription of Wireless Planning & Coordination Wing,DepartmentofTelecommunications,Ministryof Communications…………….”
“24. Basic Service Operator can provide all types of service except those for which a separate licence is required. However, the Cellular Mobile Service Operators may also be permitted to provide fixed phones based on their GSM network infrastructure in the licensed service area. The Basic Service Operator will charge the tariff, including for WLL subscribers, for services as per the TRAI tariff orders/regulations/directions/determinations issued in this regards from time to time………..”
“25. For Wireless Operations in subscriber access network, the frequencies shall be allocated by WPC Wing from the designated bands prescribed in National Frequency Allocation Plan — 2000 (NFAP-2000). However the frequency in GSM band of 890-915 MHz paired with 935-960 MHz and 1710-1785 MHz paired with 1805-1880 MHz will not be allowed under any circumstances to the licensees. For Wireless Access Systems in local area, not more than 5+5 MHz in 824-844 MHz paired with 869-889 MHz shall be allocated to any Basic Service Operator on first come first served basis. The same principle shall be followed for allocation of frequency in 1880-1900 MHz band for Micro-cellular architect based system”.
93. Subsequently on 23 March 2001, the Department of Telecommunications issued a communication bearing number 10-2/2000-BS-II (which is also on our record) which laid down the procedure for allocation of spectrum on first come first served basis to basic service operators providing WLL(M) services. This clarified that contrary to the popular impression of any basic service operator lining up first and grabbing the spectrum free, the necessary pre-requisites for allocation of spectrum to any basic service operator were SACFA clearance for installation of tower, antennae and coordination with existing users and installation of Point of Presence (POP) in the Short Distance Charging Area (SDCA). Further allocations were to be made after completion of first phase roll-out obligations and effectively utilizing the already allocated spectrum. It was further stipulated that any spectrum allocated, but not used, would be withdrawn after the expiry of one year after the date of allocation.
94. We have also seen a letter, dated 26th April 2001 form the Managing Director of BPL Communications Ltd. addressed to the Chairperson of Telecom Commission (which is also on our records) which reads as under:—
“…. This is with reference to the recently announced policy of the Department of Telecommunications to give away on a First Come First Serve basis 5 MHz of CDMA spectrum FREE OF COST to Fixed Service Providers for the entire country for operating a service called limited mobility.
As you are no doubt aware, this limited mobility service is nothing but Cellular Mobile services restricted to SDCAs…………… ………..I write to you to communicate that our company jointly and severally with Joint Venture partners and investors would be able to offer a much large amount, not less than Rs. 1000 crores for the same spectrum/licences with all the same terms and conditions that are being contemplated by the Department of Telecommunications for an all India licence………..
As you are aware, spectrum is a scarce resource and there can be only four operators possible in this spectrum band; therefore all we ask is for a fair and transparent mechanism of allotting this spectrum/licences to us………”
95. We have not been able to locate any other document or record submitted to us in this case which deals with any other “offer” from either side. Assuming this letter dated 26th April 2001 from MD of BPL Communications Ltd. to be the one referred to in the issue listed in paragraph 79(k), we have indeed not been able to see any response from the Government to this letter. However, we are unable to see what kind of inference can be drawn from this silence on the part of the Government to respond to a letter issued three moths after the decision taken by the Government on 25th January 2001 and when this letter itself was based on the presumption that spectrum would be made available free of cost and that spectrum released for WLL(M) would create problem of its availability to CMSPs. As we have already observed earlier, there are no charges for the allocation of spectrum to either the CMSPs or the Basic Service Operators; however, there are usage charges which are identical to both. The frequency spectrums allocated and allocable are separate and distinct for both the categories of service-providers with no possibility of any “encroachment”. It also appears that the offer to pay Rs. 1000 crores for the spectrum was based on this assumption that Basic Service Operators were permitted free use of spectrum which would otherwise have been available to CMSPs. From the documents available with us, none of these presumptions appear to be correct. Since, it is not our finding that the decision of the Central Government/or the recommendations of the Authority were illegal and without jurisdiction, we have not gone into the issue of redundancy of the grant of concessions to the CMSPs.
96. As already observed earlier in Paras 68 and 69 we consider that the Government should have, both on policy considerations as well as on economic grounds, levied an appropriate fee for permitting the Basic Service Operators to provide limited mobility within the SDCA. What should be the quantum of such fee; whether it should be linked to revenue-sharing; whether it should be a onetime fee; whether the fee should be limited only to SDCAs located in the 4 Metro cities of Delhi, Mumbai, Chennai and Kolkata and those in ‘A’ circles etc. are issues which are best decided by the Government in consultation with the Regulator, viz., TRAI. However, decision in this respect should be taken quickly in a time-bound manner, preferably within 4 months from the date of this order.
97. As extensively discussed in the earlier paragraphs, we have seen no illegality or arbitrariness in either the procedures followed or the final decision taken by the Government to permit the Basic Service Operators to provide Limited Mobility Services as a value-added service within the ambit of their licence. We also hold that allowing WLL with limited mobility in the basic service stream does not go against the spirit of NTP-1999.
98. We hold that WLL service with limited mobility will go a long way in increasing teledensity of the country and making available cheaper and affordable service and benefits accruing from evolving technology which are in conformity with the objectives of NTP-1999. Therefore, allowing WLL service with limited mobility would be in best interest of the telecom sector and consumers at large in the country. As long as WLL(M) service is provided as a value-added service under a FSP licence, the existing distinctions between fully mobile Cellular Mobile Service and Limited Mobile Service being provided by WLL(M) service-providers would have to be maintained. We are conscious of the fact that allowing WLL service with limited mobility will cause disturbance in the level playing field. Hence, we have suggested a number of steps which should be considered and taken for ensuring level playing field.
99. As a result of what we have discussed earlier, the Petitions fail. The Government would however immediately initiate action in terms of what has been stated in Para 68 and complete the exercise in a given timeframe, preferably within 4 months from the date of this order.
100. With these observations, the case which has been remitted back to the Tribunal, is disposed of as above.
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(R.U.S Prasad)
Member
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(P.R Dasgupta)
Member