TRAI keeps consumer out of the loop

Business Line, January 13, 2012

Its recent consumer grievance redressal regulation has operators calling all the shots.

If party A has a dispute with party B then common sense says that only a neutral third party C will be able to settle the issue in a fair manner. But what if party C is nominated by party B? Again, common sense says that party C will rule in favour of B.

However, the Telecom Regulatory Authority of India (TRAI) doesn’t seem to think so. Last week, TRAI announced an important regulation called the Telecom Consumers Complaint Redressal Regulations, 2012, aimed at improving the existing mechanism of resolving consumer complaints against operators.

Under this new regulation, the telecom regulator has set up a two-tier complaint redressal mechanism comprising the call centre at the first level and an appellate authority at the next. TRAI has also provided for a two-member advisory committee that will vet all the complaints received by the appellate authority and give its recommendations.


The problem is that TRAI has allowed operators to set up the entire system. So the call centre or complaint centre will be set up by the operator, the appellate authority will be appointed by the operator and the two members for the advisory committee will also be chosen by the telecom company.

While the regulator has said that one of the members of the advisory committee should be picked from the registered consumer groups, the recommendations of this committee are not binding on the appellate authority. By the way, the representative from the consumer group on such committees will get paid Rs 2,000 for each sitting by the operator. In addition to this, TRAI has allowed Internet Service Providers with pan-India licence to set up an appellate authority anywhere in the country while telecom companies with unified access licences or mobile licence have to set up an authority in each circle.

Thus, an operator such as Vodafone will have to set up 22 appellate authorities while someone such as Reliance Industries, which has a licence to offer Internet services across the country, can get away with just one authority for the entire country.

This mechanism, therefore, is bound to fail just like its previous version called the Telecom Consumers Protection and Redressal of Grievances Regulations, 2007. Under this regulation too, TRAI had left everything to the operator — from setting up the call centre to appointing the nodal officer.

Not neutral or independent

Consumer forums on the Internet are full of stories of how ineffective the nodal officer has been because he is simply a representative of the operator. Though TRAI has done away with the concept of the nodal officer in the new regulation, it has not offered any credible alternative.

During the consultation process, many consumer groups had written to TRAI that the appellate authority should be neutral and independent. For instance, the Kerala-based Federations of Consumer Organisations had written, “The appellate authority prescribed should be appointed by TRAI directly. If the power to appointment of the authority is given to the service providers, there is every chance for bias.”

Another consumer group, Consumer Unity & Trust Society, had stated, “The regulation should have effective safety-nets to protect their independence, otherwise it will be like many other so called ‘independent agencies’ as the selection, remuneration is in hands of appointing service provider.”

Interestingly, according to the draft regulations put out by TRAI for comments in July, the appellate authority was supposed to be a three-member body out of which one member was to be either a retired District Judge or a retired officer of the Central Government not below the rank of Joint Secretary or equivalent officer of the State Government.

Six months thereafter, this part has been dropped at the behest of the operators.

Time to revisit proposal

TRAI, in the explanatory paragraphs to the new regulation, admits dropping this clause because operators were not happy with it. “During consultation process, while the consumer organisations had supported the proposals, the service providers and industry associations argued that the above proposals were not feasible. Essentially, they did not want any outside agency in the decision making apparatus,” TRAI says in the explanatory memorandum to the regulation.

The question is, why are the operators scared of getting a neutral agency involved in addressing consumer complaints and, more importantly, why did TRAI submit to this view?

In other major telecom markets there are independent agencies to deal with telecom consumer complaints. For example, the telecom ombudsman in the UK, known as the Otelo, has been operating since January 2003. Otelo is independent of the communications industry and the regulator. It is managed by a Council that comprises people who, in most cases, are not from the communications industry.

TRAI itself had suggested setting up such an agency way back in 2004 but this never got implemented because the Department of Telecom thought it wasn’t feasible. Perhaps, it is time now to revisit that proposal because the telecom consumers in this country need a better deal.

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