No Case for Turf War, CCI and Trai
Sector, competition regulators must cooperate
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.