I wrote this about a speech of Arun Shourie, one minister in the Vajpayee cabinet who could think clearly and act decisively, in Business World of 1 January 2004.
An
apostle of convergent hope
In
October, Arun Shourie gave an important speech to the Telecom Disputes Special
Appellate Tribunal (TDSAT). He began by describing how technology was
obliterating distinctions between modes of communication and content. A
telephone could also be a radio, a walkman, a diary, and an alarm clock.
Messages could be carried by copper wires, optic fibre, or radio waves of
different frequencies.
But
government regulations conceived the telephone, radio and television industries
as separate. Within telecommunications, the government gave separate licences
for wireline, wireless and internet; within each it distinguished between
local, long-distance and international calls. For transmission of the same
message, the government imposed different prices to be charged by different
operators – wireline, wireless or internet. It allowed the sending of a message
by internet if it crossed an international boundary, but not within the
country.
This
conflict between technological possibilities and regulatory restrictions,
between new types of business and legal prohibitions, led people to breach
regulations – to a conflict between them
and administrators, to harassment of businessmen, and to the corruption of
both. The illegal businesses took away markets of legal ones, which had paid
heavy licence fees. And the frictions caused by the illegalities slowed down
the industry’s growth. This is how India had earlier fallen behind other
nations in industry; it was happening now to telecommunications.
Shourie
then described the irrationality of policies made and modified over the 1990s.
They made operators pay different amounts for the same licence and placed
different taxes on them for the same service. They made it impossible for
telephone operators to choose the shortest or cheapest route for a call or to
match a competitor’s charges. They created a distinction between licences for
wireline and wireless services, but then allowed a selected few wireline
operators to offer wireless service. They allowed new entry into wireline but
not into wireless services, although the two competed with each other. They
gave some operators more spectrum than others without any reason. They imposed
obligations that went under the same name – for instance, rollout plan, or
universal service obligation – but differed in severity.
The
irrationalities were unavoidable; technologies and government priorities
changed, and the government learnt from experience. But they left all
competitors with a grievance. They reneged on their contracts with the
government; and went to court to obtain justice. That is how this turned into
the most litigation-prone industry.
Courts and regulatory bodies
tend to respect the written word: they read laws and contracts and give a hopefully
authoritative, consistent interpretation. They are not empowered or qualified
to redraft laws or rewrite contracts. The training of those who are appointed
to the judicial bodies is adapted to their task; once they are appointed, they
consult lawyers and are exposed to accountants and journalists - not to
technologists who can work out optima. They do not look for a workable
solution; they perpetuate the inherited complexities, and often add to them.
Shourie felt that the way out
of this mess required a threefold change in attitudes. First, the state should
avoid trying to regulate all activity, and should learn to leave order to
emerge organically from practice. Second, the people should expect less from
the government. Finally, people should abandon the view that it was the
government’s duty to ensure equity to all.
After that talking-to he gave
everybody, I thought Shourie would wait for people to change – and he could
have waited forever. Instead, within six weeks he unified basic and cellular licences.
When mobile operators complained, within another four weeks he compensated
them. I do not know whether the resolutely wrong-headed people in the industry
would still squabble and snivel and snitch. But here is a minister who deserves
to win.
