The Hindu : Business : TRAI order on rate cut struck down

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Friday, Apr 29, 2005

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TRAI order on rate cut struck down

Special Correspondent

Leased circuit row takes new turn

NEW DELHI: The Telecom Dispute Settlement and Appellate Tribunal (TDSAT) on Thursday struck down the Telecom Regulatory Authority of India's (TRAI) March 11 order reducing the rates of international private leased circuits. The order was challenged by Videsh Sanchar Nigam Limited (VSNL), one of the premier providers of international bandwidth, on grounds that TRAI did not disclose the basis on which it arrived at the decision.

In its judgment, TDSAT asked TRAI to furnish all documents on the basis of which it decided to cut prices to VSNL and subsequently hear the latter's review petition in this regard.

The judgment casts a shadow over another TRAI order reducing the domestic bandwidth rates from May 1. The Bharat Sanchar Nigam Limited (BSNL) has expressed unhappiness with the proposed reductions ranging up to 70 per cent and said it would appeal to TRAI for a review. The annulment of the regulator's order on international bandwidth would jeopardise the TRAI's move to reduce the price of bandwidth and cost of operation of business process outsourcing (BPO) companies.

"We direct that all the documents and information as asked for by VSNL (appellant) be supplied by TRAI. In this view of the matter we are of the opinion that in the absence of non-disclosure of information to the appellant, principles of natural justice have been violated and that TRAI has breached the mandatory requirement of transparency in its functioning,'' said the judgment.

TDSAT said it could have heard the matter after the documents and information were supplied to VSNL but then VSNL would have been deprived of its right to be heard by TRAI. "We are, therefore, of the opinion that the matter should be heard by TRAI. We, accordingly, set aside the impugned order and remand the matter to TRAI to have fresh look after giving full opportunity to the appellant keeping in view the observations made by us in this order,'' it said.

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