No Case for Turf War, CCI and Trai

Sec­tor, com­pe­ti­tion reg­u­la­tors must co­op­er­ate

The Economic Times - - Breaking Ideas -

Aturf war is brew­ing be­tween tele­com reg­u­la­tor Trai and the Com­pe­ti­tion Com­mis­sion of In­dia, on who should en­sure com­pe­ti­tion in tele­com ser­vices. This should be avoided. Both should work to­gether, be­ing guided by the over­rid­ing ob­jec­tive of serv­ing the in­ter­est of the con­sumer best. Take a hos­pi­tal. Its ad­min­is­tra­tion and its doc­tors are best placed to de­cide how it should be run. But that does not mean the po­lice, whose job is to main­tain law and order and pros­e­cute vi­o­la­tors, should keep away when irate rel­a­tives of pa­tients start beat­ing up hos­pi­tal staff and smash­ing fur­ni­ture. Sec­toral reg­u­la­tors should mind sec­tor-spe­cific mat­ters, while the Com­pe­ti­tion Com­mis­sion is duty-bound to en­sure com­pe­ti­tion in the work­ing of the sec­tor.

Abuse of mar­ket dom­i­nance is the key tar­get of com­pe­ti­tion reg­u­la­tion. Which is the rel­e­vant mar­ket is the ob­vi­ous ques­tion, for de­cid­ing who is dom­i­nant. This can­not be as­sessed with­out spe­cific knowl­edge of the sec­tor and its di­rec­tion of evo­lu­tion. In tele­com, the mar­kets for con­tent and con­tent de­liv­ery will have dif­fer­ent con­tours, de­pend­ing on whether prin­ci­ples of strict net neu­tral­ity are part of the op­er­at­ing frame­work or not. The mar­kets for voice and data could be sep­a­rate or iden­ti­cal, de­pend­ing on the tech­nol­ogy de­ployed. Only sec­tor-spe­cific knowl­edge and un­der­stand­ing will al­low a reg­u­la­tor to de­ploy the prin­ci­ples of com­pe­ti­tion and fair trade to de­ter­mine ap­pro­pri­ate rules of con­duct as well as rule-break­ing. The sec­toral reg­u­la­tor would un­der­stand the sec­tor and its com­plex­i­ties bet­ter than the com­pe­ti­tion reg­u­la­tor; but the com­pe­ti­tion reg­u­la­tor bet­ter un­der­stands the over­lap be­tween in­dus­trial or­gan­i­sa­tion and gen­eral eco­nomic prin­ci­ples that mat­ter for as­sess­ing com­pe­ti­tion. The two can and must work in tan­dem, in­stead of mark­ing out turfs and snarling at each other.

Ease of en­try and exit of op­er­a­tors is the best guar­an­tee against preda­tory pric­ing. It stands cur­tailed by ded­i­cat­ing chunks of spec­trum to spe­cific uses and op­er­a­tors. If pol­icy al­lows true spec­trum pool­ing, mar­kets and com­pe­ti­tion would get re­de­fined.

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