SC sees turf war between CCI, Trai over Jio’s PoIs plaint

21 Feb 2018


India's telecom regulator Trai and anti-trust watchdog Competition Commission of India (CCI) are engaged in a turf battle in the Supreme Court, with both claiming jurisdiction on anti-competitive issues in the telecoms sector.

The issue at stake is allegations of cartelisation by Reliance Jio Infocomm against three established or incumbent telcos back in 2016. Jio has accused them of not giving it adequate points of interconnection (PoIs), which resulted in failure of calls made by Jio's customers to rival networks.

The Telecom Regulatory Authority of India (Trai) filed an application of intervention before the apex court last week, saying it has ''exclusive jurisdiction'' on the sector, a claim contested by the CCI on Tuesday. The fair trade regulator argued that it was well within its powers to investigate anti-competitive behaviour or abuse of dominance.

''The heavens would not fall if we investigated. The court has said there will be no civil consequences for now. So why should you injunct the director general of the CCI (from going ahead with the probe)?'' said additional solicitor general P S Narasimha before a bench led by Justice A K Sikri.

''What is Trai's great sector intervention so far? We are not trampling over their regulations,'' he said.

According to an Economic Times report, Narasimha further argued that Trai had slapped penalties for violation of sector regulations and ''I have to take it up from here.'' He added that prima facie, the allegation was of some kind of collusion, which has to be investigated.

''Maybe the delay in giving points of interconnectivity (PoIs) was due to some other reason. But it may also be due to collusion. If there is some kind of design or agreement to achieve certain purposes, we may be allowed to probe it. We may eventually fail in our probe,'' the ASG said.

The arguments will continue on 5 March. Till then, there will be no probe into the conduct of Bharti Airtel, Vodafone India and Idea Cellular.

Jio had also complained to the CCI on the issue in November 2016, which ordered a probe in May 2017 on grounds that there was prima facie evidence of collusion among the top three telcos. The regulator did not heed the incumbents' arguments that Jio had indulged in predatory pricing. CCI's director general was to complete the probe in 60 days.

The incumbents then challenged the order in Bombay High Court and won a favourable order. The CCI moved the Supreme Court in December 2017, claiming that any dispute pertaining to anti-competitive practice or abuse of a dominant position in the market fell within its ''exclusive domain, regardless of the existence of a sectoral regulator''.

Tuesday's arguments by the fair trade regulator were in response to Trai's intervention application in the case. Trai said it had the power to deal with allegations of anti-competitive behaviour, keeping consumer interests in mind, and that it had already inquired into the charges and penalties on erring companies.

''The applicant authority has the exclusive jurisdiction to regulate the telecom sector and to protect the interest of service providers and consumers of the sector,'' Trai said in its petition. ''The balance (of protecting interest of consumers, old and new telcos) needs to be struck by the authority who keeps constant monitoring, issues rules and regulations and implements the same by issuing appropriate directions.''

Friction between CCI and Trai had begun last year. CCI wrote to the telecom regulator alleging that the latter had infringed CCI's turf by examining aspects of dominance and predatory pricing as part of a consultation paper on tariffs. Trai rejected the claim, arguing that it had legal precedent.

The turf war between the two regulators is set to escalate after Trai issued a tariff order on predatory pricing last week, where it fixed a Rs50 lakh penalty per circle for each tariff plan deemed predatory and changed the definition of significant market power (SMP). Incumbent telcos say the order created confusion over the jurisdiction and future roles of the antitrust watchdog and Trai in taking calls on anticompetitive behaviour.

The Cellular Operators' Association of India, an industry body representing the incumbents, said Trai's order was a ''body blow to the industry'', and appeared to be strengthening ''ambitions of one particular operator with deep pockets and monopolistic designs'' at the expense of others''. Reliance Jio refuted all accusations.

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