NTP ’99: Good Work But Not Enough

Aften, a good measure of the government policies in any area is how much it
gets discussed about by the people who are affected by it. The less you hear
about it, the more effective it is supposed to be. Applying that measure,
framing an implementation of National Telecom Policy 1999 seems to be an
outright success. That is, in pure market economy terms.

Unfortunately, India is a developing economy. A significant part of our
population is still isolated (physically and economically) from the centerstage
of these discussions. And it is the government’s responsibility to ‘ensure’
a few things that are–or at least perceived to be–beyond the scope of market
forces. Like access to a telephone in a village. Yes, connectivity to a greater
part of India–its villages–still remains an unfulfilled task.

But the good things first.

Reforms, Phase II

In letter, India’s telecom reform started in 1994. But it was not until
1999 that the reforms were tried in true spirit.

In the reforms started in 1994, we committed a number of mistakes, some of
them too serious to continue with. Some of these mistakes were:

• The policy was not debated properly before announcing

• No legislation was proposed assuming that we could do
  with the Indian Telegraph Act 1885

• Licensing decisions were taken without first setting up a
  regulator

• No new process was thought of to make radical changes

• No calculations were made about financing before playing
  with huge licence fees

The best thing about the National Telecom Policy of 1999 was
the whole-hearted approach with which the government was trying to do something
afresh. The first sign of that was visible when the government decided to
involve the industry veterans in policy making process. Although this was not
restricted to telecom and across sectors, one of the best gainers was telecom.
While it is true that the then Telecom Commission chairman Nagarajan Vittal, the
architect of 1994 policy, had taken a lot of inputs from the industry, it was
his personal effort. The industry was not formally involved in the policy making
process. The Prime Minister’s councils, on the other hand, were headed by
industry veterans. The Council on Infrastructure, headed by Ratan Tata, under
the purview of which was telecom, made some excellent recommendations, which
were path-breaking and practical at the same time. Also, with the Group of
Telecom (GoT), the government took telecom policy making outside the Department
of Telecommunications. It also followed a more transparent approach, releasing
the draft policy to be debated openly.

However, the government’s slate was not clean this time.
Despite assuring and reassuring again and again (due to political reasons) that
the sole purpose of a new policy was to keep pace with technology convergence,
the government had to solve the mess that Indian telecom reforms had got into,
because of faulty implementation of National Telecom Policy 1994.

In reality, the reason for having a new NTP in less than five
years (NTP ’94 came after almost 47 years of India’s independence) were:

• To fill the gaps of 1994 policy

• To correct the implementation of NTP 1994

• To keep pace with technology changes

• To keep pace with regulatory changes world over

• To kickstart rapid deployment of telecom infrastructure
  that was the only barrier to India’s growth as an IT superpower

Some of the tasks at hand were

• To have a more broader approach to policy, making it
  technology neutral

• To formulate a new comprehensive legislation that would
  replace the Indian Telegraph Act

• To introduce more competition and kickstart the reforms
  process

• To get out of the mess that was created that time

• To have a better frequency management regime

• To ensure communication facilities for all Indians

• To restructure DoT to cope with the changing environment

The Change!

Industry mood: Industry mood is clearly upbeat. Few CEOs talk about policy
and regulatory issues today. And everyone sees growth ahead.

Milestones: A more director measure, this is the necessary but not
sufficient condition to test the success of any effort. The government scores
here too, scoring about 6 out of 10.

Process Improvement: A true measure of reforms, this
reflects the change in attitude of implementors. Today, most of the licensing/LoI
processes have been improved greatly. The licence for Internet telephony is just
one page long. The process improvements increases the efficiency of the system,
thus reducing time to implement. This is a major achievement in a country like
India.

Regulation: The process of regulation has not only
become more efficient, it has become more effective as well. The setting up of
TDSAT has formalized dispute settling procedure.

Benefit to the consumer: The result of all the
improvement has been a more powerful consumer. Today, he has more choices. He
has to spend less on his gadgets and services.

The Dark Spot: Universal Service

Despite the best of intentions of the government, telephones have still not
gone to more than one-third of our villages. In the rest, a significant number
of villages are covered with unreliable technology that does not work most of
the time.

The government has completely failed to force the private service providers
to go to these areas. Even Bharat Sanchar Nigam Ltd has not been able to meet
the rural targets.

This is one thing that the government has to work with single-minded
devotion. It requires a new beginning. Just as in 199, despite a lot of
criticism, the government went ahead and started the reforms process afresh,
thus making it more effective.

The option before government is not just carrot and stick.
The third, and arguable, the most effective option, would be to sincerely find a
new way and try it out. Yes, carrot and stick could be part of the package.

But it needs a new beginning.

Shyamanuja Das