Telecom Disputes Settlement Tribunal
Bharat Sanchar Nigam Ltd. vs Cellular Operators Association Of ... on 3 November, 2004
JUDGMENT
1. By this order we are deciding Appeal No.10 of 2001 filed by Bharat Sanchar Nigam and also the inter-related Appeal No.11 of 2001 filed by Association of Basic Telecom Operators and Others.
2. Appeal No.10 of 2001 has been filed by Bharat Sanchar Nigam Ltd (BSNL) and seeks the quashing and setting aside of the determination/decision of Telecom Regulatory Authority of India (TRAI) dated 3/7/2001 as well as the Telecom Tariff (15th Amendment) Order, 2001 (5 of 2001) dated 20.7. 2001, also issued by TRAI.
At the admission stage of this Appeal, stay order was given on 19-7-2001 as follows "Issue notice. Counsel for the Respondents accept notice. Reply on behalf of the Respondents to be filed within three weeks. Rejoinder, if any, on behalf of the Appellant be filed within two weeks thereafter. Status quo be maintained in the mean time.
Mr. Gopal Subramaniam, Senior Advocate, appearing on behalf of the COAI, has suggested that we should put the Appellant on terms. We see no reason to do so at this stage and this can be decided at the time of final hearing of the case. We can always address this point if we find that any damage has been suffered by the Respondents.
The Appeal is adjourned to 11th September is 2001.
In view of the above M.A.No.29 of 2001 praying for ad-interim order stands disposed of."
3. Appeal No.11 of 2001 has been filed by the Association of Basic Telecom Operators and others with the prayer that the Telecom Tariff (15th Amendment) order 2001 (5 of 2001) dated 20.7.2001 issued by TRAI be made effective from 25.12001 and further that BSNL be directed to forthwith refund to the private basic service operators all amounts in excess of the amounts due and payable under the TRAI determination of 03/7/2001 within a period of 4 weeks together with interest @ 18% per annum with effect from 26/01/2001 till the date of payment.
4. The Appellant BSNL has been a leading basic telecom service provider in the country providing basic and long distance telecommunication services through its vast countrywide network. BSNL issued a Tariff Circular No.3-5/2000-R & C(Pt) dated 29/12/2000 whereby it prescribed concessional rates for STD calls within a circle, originated by the telephone subscribers of BSNL for terminating in the basic services network, for distance categories falling within 50 to 200 kms. These rates were lower than what had been specified by TRAI in the standard tariff package for Basic Services in the Telecommunications Tariff Order 1999 (TTO '99). The relevant portion of the Tariff Circular of BSNL reads as under:
"With a view to promote community of interest, BSNL proposes to offer the following concessional pulse rates for the intra circle calls (i.e. calls originating and terminating within the same circle) originated by telephone subscribers of BSNL and terminating in the basic services network.
___________________________________________________________________________________ Distance Slabs for Existing peak time Standard Peak time Pulse in seconds made Intra circle calls pulse (pulse in pulse (in seconds) applicable seconds) as per TRAI ___________________________________________________________________________________ Above 50 kms and 15 15 120 Upto 100 kms Above 100 kms and 15 15 30 upto 200 kms ___________________________________________________________________________________ These changes in pulses were announced to become effective from 26.01.01.
BSNL issued another Tariff Circular bearing the same reference and date as the previous one i.e. No.3-5/2000-R & C(Pt) dated 29/12/2000 / 12.1.2001 reiterating the contents of the earlier circular but adding the following in the Note:
"3. Charging and Revenue sharing arrangement with Basic Service Operators will be on the standard rate as is being charged presently."
5. It is relevant to take note at this stage that the concepts of "Charging and Revenue sharing" referred to above arise from the Telecommunication Interconnection (Charges and Revenue Sharing) Regulation 1999 issued by TRAI on 28/5/99. This Regulation was intended to cover as mentioned in Section I thereof, 'arrangements among the service providers for interconnection charges and revenue sharing for all Telecommunication Services through out the territory of India ........".
6. The Explanatory Memorandum to the above Regulation clarifies certain concepts and approaches which are relevant for our purpose and these are extracted below:
"B. SCOPE OF CERTAIN TERMS USED IN THE REGULATION
8. The payment by any service provider for connection and use of the network of another service provider is conceptually divided as under:
- set-up costs i.e. all costs required for initially linking up two networks and making that link operational (including inputs such as fibre links, ports, building space and any up-gradation of equipment, as well as software required to make the interconnection operational).
- interconnection charges are the (recurring) amounts payable for the set-up costs.
- usage charges are payments for use of the network for transmission of telecommunications messages by the subscriber of the interconnection seeker. The mode of payment of such charges includes, inter alia, revenue sharing arrangements."
"5. ....... this Regulation contains certain elements which will change with time, following an analysis of more detailed data on network components. Such a process had also been indicated in the Authority's second consultation paper (Consultation Paper No.98/3, dated September 9, 1998), which stated that:
"Technological and commercial developments in various segments of the telecom markets, e.g. leased lines, affect the basis for determining interconnection charges. In addition to these changes, more detailed and up-to-date information on costs will be available over time, which will provide a better insight into the basis for determining interconnection charges, A review of interconnection charges would therefore be required in due time. Hence the proposals on interconnection prices, other than those relating to general principles, should be viewed as interim measures to be reviewed and adjusted, if required"
"6. The Authority is preparing a consultation paper on access/carriage charge regime. Access/carriage charges will provide for an efficient interconnection regime in a situation with multiple service providers interconnecting with each other i.e. the telecom environment envisaged in the National Telecom Policy 1999."
"7. Work is also underway in the Authority for preparing a consultation paper on accounting separation for telecommunication service providers. Implementation of accounting separation is very important for determining cost based interconnection charges and revenue sharing arrangements, but this is a time consuming process. The Authority's consultation paper on access/carriage charges will take into account certain aspects of accounting separation in order to determine an access/carriage charge regime in the near future. Any further refinement will be made, if required, when the accounting separation exercise provides more detailed information."
"D. REVENUE SHARING ARRANGEMENTS
21. Schedule 1 of this Regulation specifies revenue sharing arrangements for calls originating from basic service provider's network and carried by or terminated in the network of another basic service provider."
22. Schedule II specifies revenue sharing arrangements for calls originating from the network of cellular mobile service provider and carried by or terminated in another service provider's network. .............................................
29. To begin with, it must be re-iterated that the revenue sharing arrangements specified in this Regulation are interim, and are not based on detailed cost analysis. Application of an access/carriage charge regime will provide more logically tenable usage charges. That requires a detailed assessment of the underlying costs. It would, moreover, imply major changes to the existing revenue sharing arrangements, and hence an analysis is required also of the revenue implications for service providers. This is so also for suggestions made by ABTO regarding revenue sharing principles. Till any access/carriage charge regime is implemented, a system of revenue sharing must be in place to give effect to the commercial relationships arising through interconnection.
5. Relevant extracts of Schedule I and Schedule II are as below:
"SCHEDULE - I INTERCONNECTION CHARGE AND REVENUE SHARING ___________________________________________________________________________________ (1) Date of 01 May, 1999 Implementation ___________________________________________________________________________________ (2) Coverage Calls originating in a basic service provider's network and transmitted through or terminated in another basic service provider's network.
(3) Local calls Bill and keep for each service provider. (4) Domestic The originating/transit service provider to Rs.0.48 per unit of long distance of measured call for traffic delivered from its network to the
calls (STD calls) network of the transit/terminating service provider for the call units measured at the point of interconnection for its further carriage from the point of interconnection to destination, based on the STD pulse rate.
(5) International The originating service provider to pay Rs.0.66 per unit calls measured call to the transit service provider (at present the Department of Telecommunications), for the call units to be measured at the point of interconnection.
Notes:
(a) "Local calls" are calls which originate from subscribers of a service provider's network/exchange system in a SDCA and terminate either
(i) within the same SDCA or (ii) in the contiguous telephone exchange system of the adjacent SDCA, provided these are delivered/handed over to another service provider's network in the destination SDCA only.
(b) For domestic long distance calls, number of units of calls for payment at Rs.0.48 per metered call to be calculated based on the STD tariff pulse for the radial distance between the point of interconnection and the Gateway Tax where the call is subsequently delivered for further carriage/termination.
(c) No revenue is to be shared between basic service provider and cellular mobile service provider for calls originating from the former's network.
(d) This Schedule does not address revenue sharing arrangement between Videsh Sanchar Nigam Limited and the Department of Telecommunication, nor between the Indian and foreign carriers of international calls.
SCHEDULE II INTERCONNNECTION CHARGE AND REVENUE SHARING ___________________________________________________________________________________ ITEM REVENUE SHARING FOR CELLULAR MOBILE ___________________________________________________________________________________ (1) date of 01 May 1999 Implementation (2) Coverage Calls originating in a cellular mobile service provider's network and transmitted through or terminated in another service provider's network (3) Local calls Payment to basic service provider at the rate of Rs.1.20 per from cellular metered call, with number of metered calls measured at the mobile to basic pulse rate applicable to a basic service local call.
service subscriber (4) Domestic Payment to basic service provider at a rate applicable to Long distance domestic long distance calls. The charge shall be Rs.1.20 per calls from metered call, with the number of metered calls measured at the cellular mobile pulse rate applicable to basic service long distance calls, with to basic service the chargeable distance equal to the distance of the call subscriber carried by the basic service provider for an equivalent STD from point of interconnection to destination.
(5) International Payment to basic service provider at a rate applicable calls from international calls. The charge shall be Rs.1.20 per metered cellular mobile call, with the number of metered calls measured at the point interconnection at a pulse rate applicable to an equivalent international call made by a basic service subscriber Notes:
(a) The definition of "local calls" to ascertain revenue sharing with basic service providers for calls carried by them is the same as in note (a) in Schedule I.
(b) For domestic long distance calls from cellular mobile to basic service subscriber, number of units measured calls for determining the amount of revenue payable to basic service provider to be calculated as the number of such calls measured at the basic service provider's Gateway TAX up to the destination of Short Distance Charging Area (SDCA).
(c) For domestic long distance calls from cellular mobile to cellular mobile carried by basic service provider, number of call units to be paid to the basic service provider at Rs.1.20 per metered call to be calculated based on the radial distance between the Gateway TAX at the point of interconnection where the call is accepted for further carriage and the Gateway TAX of the service provider to whose network the call is subsequently handed over.
(d) For calls originating from cellular mobile, revenue sharing arrangements among one basic service provider and another basic service provider to be as specified in Schedule I.
(e) This Regulation does not specifically address any revenue sharing arrangement among cellular mobile service providers for call from subscribers of any cellular mobile service provider to subscribers of another cellular mobile service provider.
Certain expressions defined in the Telecommunication Interconnection(Charges and Revenue Sharing Regulation, 1999 are relevant.
2. Definitions:
"(xv) Non-discrimination in interconnection charge" means that service providers shall not in the matter of interconnection charges, discriminate between service providers except on the basis of substantial cost differential, and that too only to the extent justified by such cost differential".
"(xxvi) "Usage Charge" means the charge by a service provider for carriage/delivery/collection of telecommunication messages in its network.
"3. Interconnection Charges
(i) Interconnection charge shall be cost based, unless it may be specified otherwise.
(iii) No service provider shall discriminate between service providers in the matter of levying of charges for interconnection."
"4. Revenue Sharing Arrangements (1) Any revenue sharing among interconnection seeker and interconnection provider shall take place out of the proceeds of the amount payable by the subscriber for obtaining the service which involves the usage of the network of the interconnection provider."
"5. Reporting Requirement
(i) All service providers shall comply with the Reporting Requirement in respect of interconnection charges and revenue sharing arrangements specified for the first time under this Regulation, as also all subsequent changes. This includes interconnection charges and revenue sharing arrangements that are decided on a mutual basic among service providers.
(ii) The service provider may implement the proposed interconnection charges and revenue sharing arrangements after the mandatory notice period of 45 working days, unless the Authority within such period directs otherwise.
Except that an additional period of 45 days is provided for interconnection charges and revenue sharing arrangements to be reported to the Authority for the first time after the implementation of this Regulation.
(iii) When an interconnection provider informs the interconnection seeker that it cannot provide interconnection as sought for by the latter, the interconnection seeker, within 45 days of being so informed, may approach the Authority for seeking its intervention.
(iv) No service provider shall alter any interconnection charge or revenue sharing arrangement, or any part thereof, without complying with the Reporting Requirement."
Relevant extracts of the Interconnect Agreement between private basic service operators and Department Telecommunications (now BSNL) are as under:
"6.4.3 The traffic delivered on any DOT LDCC TAX from LICENSEE's LDCC TAX/SDCC tandem / local exchange will be measured on the incoming junctions of the DOT's LDCC TAX at the destination wise pulse rates applicable to the calls generated locally at the same station where the DOT's LDCC TAX is located.
6.4.4 For STD calls, originating in the LICENSEE's network and accepted by DoT (ref. para 6.2.1), DOT will bill the LICENSEE on monthly basis as STD-access charge at a rate of Rs.0.50 per unit measured call at the point of interconnection.
6.4.5 For international calls originating in the LICENSEE's network and accepted by DoT (ref. para 6.2.1), DOT will bill the LICENSEE on monthly basis as ISD Access charge at a rate of Rs.0.70 per unit measured call at the point of interconnection. The responsibility of paying to the international carrier (presently Videsh Sanchar Nigam Limited) will lie with the DOT.
6.4.6 DOT will pay access charges for STD/ISD calls originating in the DoT's network and delivered to the LICENSEE's network, at the rate of Rs.0.50 per unit measured call at the point of interconnect to the LICENSEE, only in such cases where the DOT delivers the call in an exchange other than the LICENSEE's tandem/terminal exchange (also refer Clause 2.3.4.1). However, for STD/ISD calls delivered from DOT's TAX to LICENSEE's main exchange serving multiple SDCCs, the latter shall be treated as the terminal exchange and no access charges shall be payable by DoT to LICENSEE...................."
7. From the above the following key aspects can be extracted which we would list out even at the cost of repetition as these will help us greatly in resolving the various issues:
(i) In a Multi-operator scenario interconnection between the networks of the service providers has been given due recognition.
(ii) No service provider shall discriminate between service providers in the matter of levying charges for interconnection.
(iii) Interconnection charges shall be cost based, however it has been explained that further studies were needed in this regard.
(iv) The payment by any service provider for connection and use of the network of another service provider is divided into three components:
(a) Set up costs for linking up the two networks and making the links operational (through what are called fibre links, ports, building space, upgradation of equipment etc,)
(b) Interconnection charges as recurring amounts towards the set up costs; and
(c) Usage charges for use of network for transmission of telecommunication signals, the mode of payment for which has been stipulated by way of revenue sharing arrangements.
(v) Schedule I of the Regulation specifies the revenue sharing arrangements for calls originating from the basic service network and carried by or terminated in the network of another basic service provider. Similarly Schedule II specifies the revenue sharing arrangement from calls originating from the network of cellular mobile service provider and carried by or terminated in another service provider network.
(vi) It has been clearly stated that the revenue sharing arrangements are interim and not based on detailed cost analysis. Application of an access/carriage charge regime will provide more logically tenable usage charges. Till any access/carriage charge regime is implemented, a system of revenue sharing must be in place to give effect to the commercial relationship arising through interconnection.
(vii) A reporting requirement has been stipulated in regard to alteration in interconnection charges by a service provider.
(viii) The revenue sharing arrangement among the interconnection seeker and interconnection provider shall take place out of the proceeds of the amount payable by the subscriber for obtaining the service which involves the usage of the network of the interconnection provider.
(ix) The method of computation of interconnect traffic has been stipulated in the Interconnect Agreement in terms of the pulse rate applicable to calls generated locally at the same station where the BSNL's junction point is located and in the Regulation of 1999 in terms of the STD pulse rate from the point of interconnection to destination.
8. Soon after the issue of the tariff circulars issued by BSNL, the COAI (Cellular Operators' Association of India) and ABTO (Association of Basic Telecom Operators), represented to TRAI that
(i) the BSNL reduced tariffs were anti-consumer as they did not allow BSNL/MTNL subscriber to obtain the revised lower STD charges if he calls a Cellular Mobile Number.
(ii) a Cellular subscriber would be deprived of lower tariffs if he chooses to use the STD facility from his mobile phone making use of the BSNL Network
(iii) BSNL cannot hold that for the purposes of revenue sharing with other BSOs the higher tariffs (based on earlier pulse rate) would continue to be applicable in the distance slabs of 50 to 200 kms. as this would be in conflict with the provisions of the interconnect regulations (Item 4 of Schedule I and the Explanatory Memorandum) which provided that the charges on a Metered Call Unit are to be measured at the Point of Interconnection to destination based on STD pulse rate.
TRAI examined the matter in the light of the License Agreement, the Interconnect Agreement and the Interconnection Regulation of May 1999 and concluded that the revised pulse rates of BSNL should also apply to the inter-network calls in the following situations:
(a) Call from fixed network to Cellular Mobile as far as it relates to the fixed leg of the call.
(b) For calculating the charges to be paid by Cellular Mobile Network to the Fixed Network, in respect of the fixed leg from the Point of Interconnection (POI) onwards,
(c) For payment of terminating (access) charges for calls originating in a Basic Service Operators (BSO's) Network and terminating in BSNL Network, when the distances of carriage is equal to or less than 200 kms.
9. TRAI issued on 25-1-2001 a direction to BSNL under Section 13 of the TRAI Act. and also notified on 25-1-2001 the TTO (Eleventh Amendment) Order 2001, extending application of BSNL's revised pulse rates to determine carriage charges to be paid to BSNL for inter-network call scenarios namely, from cellular mobile network to the fixed network and from private basic service providers to BSNL on intra-circle fixed to fixed network calls.
BSNL represented to TRAI to review the above, however by their letter of 7th February to CMD, BSNL, TRAI reiterated their earlier decision.
10. BSNL approached TDSAT through Appeal 1 of 2001. TDSAT set aside on 24/4/2001, the direction / order of TRAI dated 25/ 1/2001 and 7/ 2/ 2001 on the ground that adequate opportunity had not been given to BSNL to present their case before TRAI. The Tribunal further observed that ' TRAI will be at liberty to pass fresh order and / or directions in accordance with law after giving all parties a fresh hearing. Relevant portion of the TDSAT order is extracted below:
" Since the defect of not giving a hearing, the BSNL goes to the root of the matter we set aside the impugned orders / directions given by TRAI on 25th January and 7th February 2001. TRAI will be at liberty to pass fresh order and / or direction in accordance with law after giving all the parties a fresh hearing. All the parties before us will be at liberty to urge all the points including points taken before us before TRAI. We make it clear that we have not expressed any view on the merits of the controversy raised before us. All the points are left open to be decided by TRAI. The appeal is disposed of finally as above.:
11. TRAI gave its fresh determination on 3-7-2001 after giving a fresh hearing to all concerned parties and concluded as follows:.
"After due deliberation and in the light of the discussion /examinations of the various issued as brought out in prepares, the Authority has reached the conclusion that its earlier Directions and order issued under the Telecom Regulatory Authority in India (Amendment) Act 2000, do not warrant any alteration. The Authority's decision is based on the contract executed between the contending parties, and the terms embodied in the License Agreement / Interconnect Agreement. It is also in accordance with the stipulations of the Interconnection Regulation issued by the Authority in May 1999. The Authority directs accordingly:"
12. We have heard the extensive arguments and gone through the documents submitted and the pleadings. We have also gone through the very detailed determination by TRAI dated 3-7-2001 in which all the issues raised by BSNL in the appeal have been addressed.
13. One key issue is the manner of computation of access charges for calls originating in private operators' network and terminating in BSNL's network when the distance of carriage is equal to or less than 200 kms. The problem in hand is well explained through the illustration given to us at the time of arguments Itarsi and Betul are two locations within the same circle (i.e. Madhya Pradesh Circle), the radial distance between the two being 90 kms. If a BSNL basic subscriber calls from Itarsi to a basic subscriber in Betul, under the revised tariff regime of BSNL, the subscriber would pay Rs.1.20 for a two minute call (the STD pulse being 120 seconds and each pulse being priced at Rs.1.20). If a private basic service subscriber calls from Itarsi to a BSNL basic subscriber in Betul, at the old STD rates he would have paid @ 15 seconds pulse Rs.9.60 for a 2 minute call (8 pulses) and the private basic service provider would pay 48 paise per pulse i.e., Rs.3.84 as interconnect revenue charges to BSNL. The private basic service provider (BSO) however says that he cannot charge at the old rates if he has to remain in the market and willy nilly has to also bring down his rates to match the lower tariff of BSNL. In such a situation he would not charge more than Rs.1.20 for a 2 minute call from Itarsi to Betul. If he is required to pay Rs.3.84 then he would be out of pocket to the extent of Rs.2.64 for each such call. If on the other hand the new pulse rate is also made applicable to him, he would be paying to BSNL Rs.0.48 for a 2 minute call.
The finding of TRAI on this matter is as under:
"Whereas, BSNL's contention is that calculation for the Interconnection charges (terminating access) should be based on 'Standard' pulse rate specified in the Telecommunication Tariff Order issued by the Authority in March 1999, the Private BSOs / CMPSs contend that the charges should be computed based on the 'Applicable' pulse rate. On this issue, the Authority's view is that as far as calls originating in Cellular Mobile Networks and terminating in BSNL's Fixed Network are concerned, BSNL has to be paid Rs.1.20 per metered call, with the number of metered calls measured at the pulse rate applicable to STD calls originating at the point of interconnection and terminating in the destination Short Distance Charging Area. The pulse rate is the STD pulse rate for identical carriage on the BSNL's Fixed Network (PSTN). The Authority would like to reiterate that in none of the documents which are relevant to the case such as License Agreement, the Interconnect Agreement and the TRAI's Interconnection Regulation of May, 1999, there is any mention of 'Standard' pulse rate. The pulse rate for the purpose of computing the MCUs (Metered Call Units) has to be equivalent 'STD' pulse rate from the point of interconnection to destination as clearly brought in Schedule II of May 1999 Interconnection Regulation of TRAI.
As far as calls originating in the BSO's Network and terminating in the BSNL's are concerned, the carriage charge regime applicable to such calls is clearly specified by Schedule I of Authority's Interconnection Regulation of May 1999 which is as under:
'The originating / transit Service Provider to pay Rs.0.48 per unit of measured call for traffic delivered from its network to the network of the transit / terminating service provider for the call units measured at the point of interconnection for its further carriage from the point of interconnection to destination, based on the STD pulse rate' This STD pulse rate has got to be the one applicable for the distance category, for an Intra Network call originating at the POI and terminating at the same destination. This view is supported by clause 6.4.3 of the Interconnect Agreement signed by the Department of Telecommunications (now BSNL) and the BSOs. This clause (6.4.3) stipulated that : 'The traffic delivered on any Department of Telecommunications LDCC TAX from Licensee's LDCC TAX / SDCC tandem / local exchange will be measured on the incoming junctions of the Department of Telecommunication's LDCC TAX at the destination wise pulse rates applicable to the calls generated locally at the same station where Department of Telecommunication's LDCC TAX is located.' It would appear from the submissions of the BSNL that they are reluctant to apply the new pulse rate, corresponding to the reduced tariff upto 200 kms, because of reduced settlement charge and a higher retention by the BSOs and would like to unilaterally modify the settlement charge regime. However, the Authority is of the view that it would not be legally tenable to modify the Interconnection Agreement and the embedded settlement (access) charge regime. The Authority intends to review the existing access charge regime in the context of the opening of the NLD market, which will bring in a multi-operators environment, involving the facilities of more than two Operators to carry a call from its origination to its destination. However, till such time a new regime is put in place, the existing TRAI Interconnect Regulation should govern the payment of access charge by one Operator to another.
The Authority does not agree with the contention of the BSNL that a 'Standard' pulse rate was stipulated in TTO 1999 to reflect cost based tariffs. It would like to clarify that contrary to the contention of the BSNL, the existing STD tariff structure is cost plus and the access charge regime is also not based on unbundling of Network elements and their costing. It is an adhoc arrangment, based on revenue share percentage of about 60:40 incase of Near End handover and 100 : 0 in case of Far End handover when the tariff for a Metered Call Unit is Rs.1.20. Only these two types of handovers are stipulated as per Licence Agreement / Interconnect Agreement, which has been basically been negotiated commercially by the concerned parties."
We do not find any reason to disagree with TRAI on the above conclusion.
14. We also agree with TRAI that Alternative Tariff package should consist of tariff elements belonging to the same service. While rental and local call charges comprise the local service, the BSNL circular advising bundling rental with long distance charges has the potential of disturbing the level playing field as it would give undue advantage to BSNL vis-à-vis private BSOs.
15. The other key issue relates to the denial by BSNL of the concessional tariff to Cellular subscribers wishing to make a call to a BSNL fixed line subscriber and also to BSNL fixed line subscribers wishing to make a call to cellular subscribers. The arguments and findings of TRAI in this regard are extracted below:-
"The Authority finds merit in the contention of the COAI that Cellular Mobile subscribers are in fact BSNL's subscribers when they make a STD call from their mobile phone to a fixed phone connected to the BSNL's PSTN. This is so in terms of the Licence Agreement as the Cellular Operator is only required to collects STD charge from his subscriber at the BSNL's prescribed rates, and hand over the same in its entirety to the latter. Denial of this facility of making STD calls at the reduced rate which is available to the subscribers of BSNL would amount to a discrimination against the cellular subscriber.
It has also been reported that BSNL is not extending the reduced rate to their own subscribers when they make a call to mobile phone. The Authority is of the view that by not extending the facility of reduced tariff, as reflected in the new pulse rate for distance slabs upto 200 kms for the fixed leg of an Inter-Network call involving a calling BSNL subscriber and a called mobile subscriber, BSNL is denying the advantage of a cheaper calling rated to their own subscribers, which is clearly anti-consumer. Such PSTN-PLMN Inter-Network calls have two distinct tariff elements i.e. one for the PSTN leg and another for PLMN leg, called 'airtime'. They are quite independent of each other. For the PSTN leg, the tariff has to be identical as for an Intra-Network PSTN call of identical carriage."
We agree with the findings of TRAI as this line of thinking is consistent with the approach taken by the Tribunal in Appeal No. 12 of 2001 decided on 7-2-2002 wherein it has been held that a service provider cannot discriminate between the same class of subscribers. The Tribunal had held that "it is the duty of the TRAI to ensure that no discrimination is practiced by the service providers in fixing tariff. The interest of the consumer is always to be borne in mind."
16. With reference to the tariff circular dated 29-12-2000 / 12.01.2001 which contained the aforesaid note No.3, it was submitted on behalf of ABTO that had this note been there in the tariff circular dated 29-12-2000 submitted to TRAI, TRAI would have certainly intervened in the matter. This argument was also raised before TRAI wherein it is stated in the impugned order of the TRAI, while noting the argument of ABTO "While reporting to the TRAI as a change in tariff, under Section III of the TTO'99, BSNL had not disclosed the vital fact that the access charge for Private Service Providers would be based on the 'Standard' tariff pulse rates and not 'Applicable' pulse rate. It appears TRAI did not find any merit in this submission and was not discussed in the impugned order. We see no reason to accept the argument that TRAI was misled on account of note No.3 being not there in the tariff circular submitted to it by BSNL.
17. An important argument put forth by Learned Counsel of ABTO related to the dispensation apparently given by BSNL to MTNL in regard to the revenue sharing charges or access charges. In this regard, our attention was drawn to the concessional revised tariffs offered by MTNL to its subscribers for STD calls in Maharashtra circle which it could not have given without reaching an understanding with BSNL. If BSNL could enter into this arrangement with MTNL, there was no reason why it could not do the same with other basic service providers.
18. The Learned Counsel for ABTO drew our attention to subsequent developments which we would like to mention briefly as they help in understanding the totality of the situation and the evolving nature of the network sharing scenario in the telecommunication sector.
(i) In a letter dated 11.1.2002, addressed to ABTO, BSNL announced discounted STD pulse rates in the distance slabs greater than 200 kms (for intra-circle calls) and for all distance slabs for inter-circle calls to all subscribers who use BSNL network. Basic Service Operators were advised to charge long distance calls from their subscribers as per the reduced pulse rates. Thus the benefit of reduced pulse rates was given in the revenue sharing arrangements with the other operators making use of the BSNL network. BSNL did not extend this benefit for intra-circle STD calls within a distance of less than 200 kms on the ground that their appeal in the matter was pending before TDSAT.
(ii) BSNL has implemented the Interconnection Usage Charge (IUC) Regulation 2003 (1 of 2003) regime with effect from 1.5.2003, which stipulates payment of specific interconnect charges whose quantum is not linked with the STD tariffs. Thus the revenue sharing regime linked with tariffs for determining interconnection usage charges existed only upto 30-4-2003
19. Taking into account all the circumstances, we have reached the conclusion that there are no sufficient grounds to accede to the prayers of BSNL in Appeal 10 of 2001.. We hold that the TRAI determination of 3-7-2001 based on the directions of TDSAT in Appeal 1 of 2001 is based on sound reasoning and the said order as well as the TTO dated 20-7-2001 need to be upheld. However, in view of our interim order dated 19-7-2001 we proceed to examine on how to mould the relief in the matter.
20. During the course of hearing in this matter, the Learned Counsel for BSNL had pointed out that appeals 10/2001 and 11/2001 had become infructuous in view of the coming into effect of the IUC Regime w.e.f 1-5-2003. (Under this regime specific charges have been fixed in regard to carriage and termination and these have been delinked from tariff). On behalf of ABTO it was however pointed out that in view of the order of status quo granted by the Tribunal on 19/7/2001 in Appeal No. 10 of 2001, BSNL had continued to charge higher access charges, as such, the private basic operators were entitled to refund and also payment of interest. In view of the fact that we are examining how to mould the relief in view of the interim orders made in Appeal 10/2001, we hold that to that limited extent Appeal 10/2001 survives.
21. We are unable to accept the prayer of ABTO and others in Appeal 11 of 2001 that the order of TRAI dated 3-7-2001 be given effect to from 25.1.2001. The earlier orders of TRAI dated 25-1-2001 were quashed by this Tribunal on 24-4-2001 in the following terms.
"Since the defect of not giving a hearing, the BSNL goes to the root of the matter we set aside the impugned orders / directions given by TRAI on 25th January and 7th February 2001. TRAI will be at liberty to pass fresh order and / or direction in accordance with law after giving all the parties a fresh hearing. All the parties before us will be at liberty to urge all the points including points taken before us before TRAI. We make it clear that we have not expressed any view on the merits of the controversy raised before us. All the points are left open to be decided by TRAI. The appeal is disposed of finally as above.:
(Emphasis Supplied) When there is a specific order by this Tribunal on 24-4-2001 setting aside the order / direction of TRAI dated 25-1-2001 / 7-2-2001 with a further direction to pass fresh orders and / or directions, it is quite clear that the earlier order of the TRAI became non-est. TRAI was required to pass fresh order and / or direction. This order of the Tribunal dated 24-4-2001 was not appealed against. It has, therefore, to be held that the direction dated 3-7-2001 of the TRAI would take effect from that date only.
When we examine Appeal No 11/2001, we find that in the whole body ABTO is only asking for payment of excess amount actually due under the earlier determination of TRAI dated 25-1-2001 and between the period from 26.1.2001 to 30.6.2001. ABTO has given an estimate of this figure for appellants - HFCL Infotel Ltd., Hughes Telecom (India) Ltd., Shyam Telelink Ltd., Tata Teleservices Ltd., Bharti Telenet Ltd. Only in the penultimate paragraph before the grounds, the petition states under:
"In these circumstances, the Appellant is left with no option, but to file the present Appeal seeking appropriate Orders expressly declaring that the TTO (15th Amendment) ought to be deemed to have come into force w.e.f. 25.1.2001 and the BSOs are entitled to refund / adjustment of the amounts paid by them in excess during the period commencing 26.1.01 till 20.7.01, or till the date of implementation by BSNL of the TRAI orders dating 25.1.01 and 3.7.01 and 20.7.01."
22. Thereafter, after the grounds, the prayers come. It would appear that appellants want only refund of excess charges as claimed by them for the period from 21.1.2001 to 20.7.2001. Since, however, both the appeals have been heard together we will not enter into any technicality and consider the refund of any amount paid by aforesaid BSOs-service providers after the period from 3.7.2001 to 1.5.2003 when the Interconnection Usage Charge Regulation 2003 regime came into effect. We do not approve the stand of BSNL that the benefit of reduced pulse rate could not be given w.e.f. 11/01/2002 merely because their appeal was pending before this Tribunal.
23. Nowhere in the pleadings in either of the appeals ABTO has stated the exact amounts as claimed by it from BSNL. In this view of the matter, the accounts will have to be gone into if aforesaid BSOs have made any payment in excess to BSNL from their own resources without billing their respective subscribers. To go into the accounts of both BSOs and BSNL to arrive at the figure of any excess payment made by BSOs to BSNL, during the period from 03/07/2001 to 01/05/2003, we appoint Shri N. Parthasarathy, former Member (Finance) Telecom Commission (resident of D-6/1, MS Flats, Sector-13, R.K.Puram, New Delhi-110066 Telephone No 26873586) as Local Commissioner. We fix his fee tentatively at Rs.30,000/- to be shared equally by the BSNL and ABTO through the concerned BSOs. The amount of the fee shall be exclusive of the expenditure that the Local Commissioner may have to incur and this amount will also be shared equally between the parties. In the discharge of his duties, parties shall obey all the directions that the Local Commissioner may have to give regarding examination of their respective accounts. Local Commissioner shall submit his report within two months.
24. Parties shall appear before the Local Commissioner on 5.11.2004 at 11 AM at his aforementioned address.
25. Both the appeals stand disposed of as above. Liberty to the parties to move this Tribunal again after the receipt of the report of the Local Commissioner, if so required.