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Exclusive agreements between builders & telcos creating monopoly: TRAI consultation paper


Exclusive agreements between Resident Welfare Associations, builders, contractors, airports and telecom companies are creating an artificial monopoly, the TRAI suggested in a consultation paper titled “Consultation Paper on In-Building Access by Telecom Service Providers.” The paper seeks to address challenges faced by consumers who are forced to use a singular service; and telcos who are hindered by building owners/developers who choose to sign commercial agreements with and exclusive service provider.

The regulator said that apart from exclusive agreements, telcos are often forced to delay expansion of their services in certain localities as builders/developers delay negotiations or request exorbitant rents. Due to this, the TRAI has called for creating a new framework that could be applicable in buildings and other areas to enable “telecom operators to obtain efficient access on reasonable terms and conditions.”

TRAI’s suggestions to fix the problem:

The regulator has suggested certain provisions that could be applicable to curb artificial access restrictions placed on both telcos and consumers. These include:

Shared infrastructure:
Property owners could have an option to register themselves as an Infrastructure Provider hosting necessary switches & routers, optical fiber wires, repeaters, and other In-Building Systems. Telecom companies could register and share this infrastructure to extend cellular and wireline services to consumers. This can be mainly applied in malls, bus stations and airports.

Prohibit contract agreements: Both telecom companies and builders/contractors could be disallowed into signing exclusive agreements which could benefit a single or a group of telcos. In addition, a builder or telco who owns telecom infrastructure in a building/locality cannot deny sharing of infrastructure with other service providers, and could mandatorily agree to share their infrastructure.

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Mandatory minimum infrastructure: Local administrators like municipalities and public work departments could mandate creating spaces or channels for installing telecom infrastructure in new buildings and projects. Malls, hotels, and other big residential projects could be mandated to install fiber cables and telecom infrastructure requirements to facilitate telcos to provide their services without interruption. These facilities should not be seen as revenue source; but as an essential infrastructure. Therefore, no charges should levied by the building owner.

Right of Way permissions: The consultation paper had also referred to a DoT proposed Right of Way amendment under the Indian Telegraph Act, 1885 (ITA) to help speed up works carried out by authorities and telcos while laying optic fiber lines or other internet lines, and to ease procurement of telecom and internet licenses. In March, the DoT proposed three new amendments to formulate Indian Telegraph Right of Way Rules 2016, under ITA 1885. Read more on it here

Consumers are left with fewer choices

The regulator has stressed in many parts of the paper that consumers are limited to choice of service providers in his/her residential area due to exclusive agreements. Many consumers are moving to high-speed data connections and for supplementing this growth, a telco needs access to in-building solutions (IBSs), Micro base stations, WiFi routers, repeaters, etc, said the TRAI.

Some telcos might install IBS systems in building premises through exclusive agreements and may not allow other service providers to share its IBS or might demand high-prices for sharing. Such practice according to the TRAI “not only limits competition, but also leaves no choice to consumers but to take services from the contracted TSP (service provider)”

“It has come to the notice of the Authority that in many areas there are problems in getting the access (for telcos) to buildings. Any situation, which may take away such benefits of competition, is certainly a cause of regulatory concern. Providing redundant connection from alternate service provider so as to have uninterrupted connection is also a need of the hour,” TRAI said in the paper.

Question for consultations

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The regulator has asked the following questions, and is looking for answers and suggestion from telcos, industry stakeholders and consumer for the same. Comments can be sent to advmn@trai.gov.in until 14th July 2016.

  1. Do you agree that there is a need to address the issues discussed in this consultation paper or the market is capable of taking care of these issues without having any policy intervention/guidelines in this regard?
  1. How can sharing of telecom infrastructure inside a residential or commercial complex/airport/hotels/multiplexes etc among service providers be encouraged? Should the sharing of such telecom infrastructure be made mandatory?
  1. In view of the international practices given in para 18-23 of Chapter-II of the Consultation Paper, what provisions should be included in the National Building Code of India to facilitate unhindered access for all the TSPs?
  1. Any other option, which in your view, could resolve the issues discussed in this consultation paper?


Image Credit: Wikipedia user Fabienne Serriere under CC BY-SA 3.0

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