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2008 (4) TMI 723

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....ecom Regulatory Authority of India ("TRAI") Act stood enacted. The Government introduced New Telecommunication Policy ("NTP") in 1999 and proceeded to implement the said policy. By TRAI (Amendment) Act, 2000 a key change came to be effected as a result of NTP, 1999. The said amendment segregated the Regulatory and Dispute Settlement norms of the original TRAI. Under the new regime, all disputes involving consumer and service provider(s) had to go to TDSAT. The said regime excluded civil courts from ruling on disputes arising out of TRAI decisions. TDSAT was conferred with original and appellate jurisdictions. The TRAI (Amendment) Act, 2000 defines precisely the regulatory powers of the TRAI. The said Regulator became responsible for introduction of new service providers, technical improvements, quality standards and fixing the terms and conditions of licences. One more event needs to be mentioned. In order to separate policy making and service provision roles of the DoT, the Government created Department of Telecom Services ("DTS"), which was later turned into the corporate entity known as BSNL on 1.10.2000. 4. Under the NTP, 1999, all new cellular mobile service providers had t....

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....e cell system of that provider, which is local. When travelling out of the range of the said cell system, the cell system can enable him to be transferred to a neighbouring company's cell system without the subscriber being aware of it. This is called roaming service. A cellular telephone is not to be confused with a cordless telephone, which is simply a phone with a very short wireless connection to a local phone outlet. High mobility of the users is one of the important properties of cellular telephone. The location of a user can change significantly during a call which can originate from the user or from the network. In cellular telephony a mobile user communicates with a base station. The base stations are connected to MSC, which is connected to the public telephone system. The most important aspect of cellular telephony is the unlimited mobility. The user can be anywhere within the coverage area of the network (i.e., it is not limited to a specific cell). The user can move from one cell to another even during one call. Cellular telephony is different from cordless telephone. In cordless telephone, there is a wireless link between a handset and a base station which in....

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....instrument is not fixed, it can be moved. As regards portable wireless, it is battery-powered wireless device or system which operates outside the office, home or vehicle. Its operation is autonomous. The examples of portable wireless are handheld cell phones and PCS units. All the above examples are common examples of wireless equipments in use today. iii) Wireless Mobile Communication: There are a variety of wireless communication systems for transmitting voice, video and data in local or wide areas. Mobile wireless technologies provide voice and data communication services to mobile users to use cell phones, internet terminals and related computing devices. iv) Wireless Communications Service (WCS): WCS is radio communications that may provide fixed, mobile, radio location or satellite communication services to individuals and businesses within their assigned spectrum block and geographical areas. WCS is today capable of providing more advanced Wireless Phone Services that would be able to pinpoint a subscriber in a given locality. WCS is today used to provide a wide variety of mobile services, including an entire family of new communication devices utilizing s....

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....ons in all the surrounding cells that the user may be moving into their cells. As the user moves into a new cell, the base station in that cell takes over the call. The frequency of the call is changed to a frequency used in the new cell during the transition. This is because adjoining cells cannot use the same frequencies. ix) Wireless Local Loop (WLL): Today, technologies provide WLL services, i.e., wireless access for home and business users to carriers and service provider network. According to Encyclopedia of Networking & Telecommunications by Tom Sheldon, wireless local loop ("WLL") refers to a variety of technologies for connecting subscribers to the public-switched telephone network ("PSTN") using wireless links, rather than copper wire. WLL is a practical solution for connecting subscribers in countries/areas that do not have the wired infrastructure. It is also practical in rural areas as an alternative to laying cable. WLL is primarily a fixed wireless service (the subscriber generally stays in one place), while cellular systems offer mobile communication and roaming among different systems. x) Basics of Wireless Communications: Today's wireless commun....

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....nd the transmitting antenna located in the BTS are aligned and they constitute access network whereas MSC is the exchange in which there is core network consisting of BSC, numbering plan, softwares etc. which are essential to identify the source from which the call originates, the movement of the subscriber from one cell to the other and the identification of the call for billing purposes. The Intelligent Network is in MSC. Generally, radio signals are emitted from an antenna omni- directionally and they can pass several hundreds of kilometers without being affected by obstacles (what is known as seamless), which makes radio signals very attractive for radio and television broadcast. In wireless communications, different types of antennas are used which differ from each other in respect of directivity of signals propagation. When signals travel away from a transmitting antenna in a BTS, they are exposed to a reduction in their strength. The degree of attenuation depends upon the distance between the transmitting antenna and the receiving antenna, the wavelength of the signals and the surrounding environment (e.g., indoor, outdoor, rural, urban etc.). In wireless communicat....

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....ork consists of a number of radio cells where the term "cell" refers to geographic coverage area of a BTS. The size of the coverage area depends on the signal strength of the base station and the degree of attenuation. Each BTS is assigned a certain number of channels for transmitting and receiving data which is called as cell allocation ("CA"). To avoid interference between cells, it needs to be guaranteed that the neighbouring base stations are also assigned cell allocations of different channels. There are no sharp borders between neighbouring cells. Most of the time they overlap. In urban areas, a mobile device can hear a set of around 10 base stations simultaneously, and then it selects from this set of base station within the strongest signal. The number of cells a network is made up of is basically a function of the size of area to be covered and the user penetration. When building up a new network, operators first concentrate on establishing a coverage in congested urban areas before establishing base stations in rural areas. If a network runs the risk of becoming overloaded in a certain region, the operators can increase the capacity by increasing the base stations density....

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....le or fixed wireline is all done by the computer having the requisite software in MSC. xii) Fixed Wireless Access WLL(F): Fixed wireless access ("FWA") also known as WLL(F) has coverage between Wireless Local Area Networks ("WLANs") and cellular communication systems. The main purpose of FWA is to provide network access to buildings through exterior antennas communicating with central radio base stations. In this way, users in a building are allowed to connect to the network with conventional in-building networks. FWA is a service in which wireless access is intended as a cheap cable replacement without additional features. FWA replaces copper lines to the homes of the users by wireless links, but without the specific benefit of mobility. The original intent was to give access to customers for basic phone services bypassing the copper lines. Fixed wireless access system is one type of service. FWA system can also be considered as a derivative of cordless phones or wireless local area networks. FWA system essentially replaces a dedicated cable connection between the user and the public landline system. The important difference to be noted is that FWA system is not the....

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....ber is checked in the HLR and only thereafter the call is forwarded to the location. The call is forwarded to the BSC in whose area the subscriber is routing to and selection of one BTS is the responsibility of the BSC. Therefore, one can conclude that from time to time a controlling MS (user) has to send updates of its location to its HLR. At the same time, the VLR and the MSC contains all the information about mobile subscribers from other networks that are in the area of this MSC and are allowed to roam in the network of this MSC. The Authentication Centre verifies the identity of each MS requesting a connection. The above discussion indicates the functionality of MSC, BSC and BTS. The data base is in MSC. It further indicates the functionality of BTS. BTS is, essentially concerned with transmission. The entire data base and the function of identifying the user and the call is in MSC. The numbering plan is one of the important elements of the network with MSC. The switching system is with MSC. The network and switching system includes the above two databases. The main component of network and switching subsystem ("NSS") is MSC, which controls the traffic between different ....

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....eplacement without additional features. References: The above technical data of concepts between sub-paras (i) to (xiv) is based on references from the following books: 1. Wireless Communications by Andreas F. Molisch 2. Wireless Intelligent Networking by Gerry Christensen, Paul G. Florack and Robert Duncan. 3. India The Emerging Giant by Arvind Panagariya 4. Location-Based Services Fundamentals and Operation by Axel Kupper 5. From WPANs to Personal Networks-Technologies and Applications by Ramjee Prasad and Luc Deneire 6. Mc Graw Hill Encyclopedia on Networking & Telecommunications by Tom Sheldon 7. Encyclopedia of Technology Terms by Whatis.com xv) Generic Requirements: (a) Generic Model of Wireless Local Loop System: Apart from references to the technical data hereinabove, Government of India (DoT) has issued G.R. No. G/WLL-01/01. MAY 96 regarding generic requirements relating to Digital WLL system. These generic requirements issued as far back as May, 1996 is in consonance with the technological concepts enumerated in the above reference books. It supports what is stated hereinabove. We, therefore, quote hereinbelow relevant paragraphs from t....

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....o the wire line subscribers as defined in clause No.4.2 of this GR. 2.0 GENERAL REQUIREMENTS 2.12 Remote station equipment shall be a fixed indoor/outdoor unit suitable for wall mounting with minimum inconvenience to the subscribers. All accessories for mounting shall be supplied alongwith the equipment. 2.20 Mobility functions : optionally the system may support limited mobility within designated area. The mobile handsets shall conform to relevant standards for mobile application. The equipment supplier shall indicate the coverage area for mobility for the equipment offered. 12.0 Network Management System (NMS) : The Network Management System (NMS) shall be capable of performing the following functions: i) Fault localization including BSC, BS, RS and links between them. ii) Network configuration i.e., addition, deletion and change of network elements etc. iii) Performance, data collection. iv) Security against unauthorised access v) Network statistics Data related to channel occupancy, rejected calls etc. with visual display of faulty elements of the network. 15.0 Antenna : The type of antenn....

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....network that the terminal accesses, e.g. Internet, PSTN, etc.). Radio transmission technology: access technique (TDMA, CDMA, etc.), modulation technique (analogue, digital, etc.), duplex technique (FDD, TDD, etc.), etc. Delivery mechanism: terrestrial, satellite, etc. Of particular interest are the mobility characteristics of wireless access systems; thus this Recommendation provides definitions of the terms "fixed", "mobile" and "nomadic" wireless access. The purpose of this Recommendation is to specify terms and definitions for terrestrial wireless access. 2 Scope The Recommendation specifies definitions for terms primarily focused in the field of terrestrial wireless access systems. Wireless access applications may be provided within the definitions of the radio services FS, MS, FSS and MSS contained in the RR. The ITU has deprecated the use of the term "loop" (see References below: CCITT Blue Book, Vol. I, Fascicle I.3, 1988); for this reason, and more so because this term does not make any sense with radio technologies, the use of the terms that include loop are deprecated. These include wireless local loop, radio ....

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....;                               End-user connection point ? D ------------- FWA radio station ? ------------- -------|  |  |  | Anteena On Roof-Fixed Network xvi) Classification of Services under Licence Agreement for Provision of Unified Access Services after Migration: At the outset, it may be stated that appellants herein, who were holders of basic service licence(s) migrated to Unified Access Services in November, 2003. The said UAS licence is dated 20.7.2001 w.e.f. 21.11.2003. The said UAS licence covers "access service" which includes wireline and/or wireless service including full mobility, limited mobility and FWA. Basically, in these civil appeals we are concerned with three wireless services, namely, full mobility, limited mobility and FWA. What is FWA has also been explained earlier in this judgment. We quote hereinbelow clause 2.2(a) and clause 2.2(c)(i), which read as follows: "2.2 (a) The SERVICES cover collection, carriage, transmission and delivery....

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....se 2.2(c)(ii) that the Basic Service operators like the appellants after migration to Unified Access Licence Regime can also offer limited mobility service for such customers who so desire. In these civil appeals we are concerned with the concept of limited mobility as a service which attracts ADC. Clause 2.2(d)(i) inter alia provides for compliance with standards prescribed by ITU-RCA which have been quoted hereinabove. We quotre hereinbelow clause 2.2(d)(i), which reads as follows: "2.2 (d)(i) The LICENSEE is permitted to provide, SERVICE by utilizing any type of network equipment, including circuit and/or packet switches, that meet the relevant International Telecommunication Union (ITU)/Telecommunication Engineering Center (TEC) / International standardization bodies such as 3GPP/3GPP-2/ETSI/IETF/ANSI/EIA/TIA/IS". Meaning of Interconnection Usage Charges ("IUC")/ ADC: 10. On 29.10.2003, TRAI notified IUC. ADC is a part of IUC. ADC is a percentage of the revenue. The framework of IUC regime was established by TRAI through its Regulation dated 24.1.2003 which was subsequently reviewed on 29.10.2003 and 6.1.2005. IUC has to be determined based on minutes of us....

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....ment "Walky" is a fixed wireless phone having portability as its feature. That, BSNL had no authority to classify the said instrument as a mobile phone. 13. According to the learned counsel, the abovementioned WLL(M) is a service. It refers to a mobile set and not to a portable FWP and, therefore, the said instrument "Walky" which is portable is not classifiable as WLL(M). That, in any event, classification disputes lay before TRAI under the 1997 Act and that BSNL has no authority to classify/reclassify the said "Walky" as WLL(M). In this connection, it is urged that BSNL could have filed its complaint before TRAI and BSNL could not have unilaterally called upon the appellants to pay ADC after such re-classification. The questions raised on behalf of the appellants is: Who pays ADC? Who decides as to who pays? In this connection, it is further submitted that under section 11(b)(ii) of the 1997 Act, the terms and conditions for grant of Inter- connectivity is to be fixed by TRAI; it is mandatory function of TRAI to do so and, therefore, it is beyond the competence of BSNL to re-classify and fix the ADC liability on to the appellants. 14. Learned counsel urged that from 1997 to....

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.... raise the demand. 17. On Technology, learned counsel urged that after introducing the concept of ADC, the categories of the services were Fixed Wireline, WLL(F), WLL(M) and Cellular which is now re-classified unilaterally by BSNL and DoT as Fixed Wireline; WLL(F) = WLL(M) and Cellular. Learned counsel urged that if WLL(F) had to be shifted to WLL(M), then that question needs to be looked into by the Authority, hence remand becomes necessary as such re-classification cannot be done by BSNL unilaterally. Learned counsel submits that correct classification for ADC could have been done only by TRAI and not by BSNL/DoT and that too after following the procedure under section 11 of the 1997 Act. 18. Learned counsel next urged that neither in the Licence nor in the 2003 Regulations is there any Premises Specific Restriction ever imposed and, therefore, it was not open to BSNL to make the impugned demand as the said restriction was not there during the relevant period. In this connection it was urged that during the entire period between 1997 to November, 2004, even DoT understood "Walky" to be portable in the entire SDCA; that only in March, 2005 it gave directions to the contrary ....

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....t in the "Walky". It is urged that WLL(M) is a service given by the instrument "Walky". What is relevant is the Service and not the Instrument. It is urged that the appellants herein had invoked the Original Jurisdiction of TDSAT on the question of characterization of service which has been answered in favour of BSNL. It is urged, that nature and classification of instrument was not relevant; that what was relevant was the feature of the service in the instrument "Walky" and whether that feature made it WLL(M) service, to which ADC stood attracted. All these questions have been answered by TDSAT by its impugned judgment in favour of BSNL. By the impugned judgment, it has been held by TDSAT that Walky Calls attract ADC under the Regulatory Regime. 22. It was next urged that on facts there was no unilateralism as the Demand was made by BSNL only after the TRAI and the DoT had issued the above Circular and Directive respectively which have not been challenged. It is pointed out that in fact appellants have complied with DoT's order. Learned counsel would submit that if there was compliance of the Order/Directive of DoT dated 26.8.2005 there is no reason why appellants should no....

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....ation rate (or teledensity as measured by number of phones per hundred) has attracted global attention. Mobile phones have introduced competition in providing access and services at global competitive prices and state-of-art technology. The competition is now relevant not only among the private providers of mobile services, but also among the private and public providers of both fixed and mobile services. India's NTP 1999 emphasised the Government's commitment to provide basic telecom services to all people at affordable and reasonable prices. This commitment is called the Universal Service Obligation ("USO"). 29. At the outset, it may be stated, that, Regulatory Restriction should not be confused with technology limitation. With the technological advancement, "extent of mobility" has gone way beyond the "Premises Specific Restriction" but in this case we are not concerned with technology but with the levy of ADC. According to some authors, ADC is a tax. In the Revenue Regime, the Authority imposing the levy is not always bound by the concepts in technology. It is open to the Authority under the Revenue Regime to impose by way of Regulatory Restriction a parameter like P....

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.... no authority to levy ADC unilaterally on the appellants. According to the appellants, TRAI had issued its directive dated 4.3.2005 at the behest of BSNL without TRAI itself decided the categorization of service. According to the appellants, in any event, TRAI had acted at the behest of BSNL in issuing the said directive. According to the appellants, the said directive seeks to treat the Walky calls as WLL(M) whereas all over the years between 1997 to 2004 the said service stood classified as WLL(F). According to the appellants, if at all TRAI wanted to reclassify the said service as WLL(M) it ought to have followed the procedure laid down under Section 11 of the 1997 Act. The effect of such directive, according to the appellants, is not only to reclassify the services but it also seeks to amend the terms and conditions of UAS Licence. It may be stated that directive dated 4.3.2005 stood clarified by DoT vide two clarifications dated 23.3.2005 and 26.8.2005. According to the appellants, the said clarifications were issued in the context of advertisement given by the appellants, which were later on withdrawn and that the said directive had no connection with ADC chargeability. Accor....

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....n against you under the relevant clauses of the License Agreement. This issues with the approval of the Authority. Sd/- (R.K. Bhatnagar) Advisor (FN)" "No. 10-10/2003-BS II/Vol.VI Government of India Department of Telecommunication Licensing Cell (Basic Services Group) 1406 Sanchar Bhavan, 20, Ashoka Road New Delhi 110001 23rd March, 2005 To All the UASL Licensees BSNL and MTNL Sub: Clarification regarding Fixed Wireless Terminal in UAS/Basic Service Licence. With reference to the subject mentioned above, the undersigned is directed to clarify that the terminal used for fixed wireless services should be strictly confined to the premises of the subscriber where the telephone connection is registered. It should also be noted that it is licensee's responsibility to ensure that the subscriber terminal is operated in accordance with the terms of the Licence for fixed lines including this clarification. This is to further reiterate that separate level within allocated SDCA based Link Numbering is to be used for Wireline & Fixed Wireless Servi....

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....t received ADC from WALKY Calls. Whereas M/s. Tata Teleservices Ltd. was supposed to provide services within the scope of its licence agreement and it was expected that by way of advertisement or promotion of its services, the subscriber should not be misled. Whereas a notice was issued for alleged violation of conditions and not limited to clause 2 of Unified Access Services Licences on 06.01.2005 and 31.01.2005 regarding WALKY service. And whereas M/s Tata Teleservices Ltd. replied to the notice vide letter dated 21.01.2005 and 02.02.2005 of stating that there has been neither any attempt nor any intention to mislead any subscriber in relation to services being provided by M/s TTSL and they continue to provide services within this scope of licences. The Fixed Wireless Terminal (FWT) instruments are prominently advertised as bulky desktop phones and therefore customer is clearly informed of the nature of the services and the phone instrument. The numbering scheme of both FWT & Wireline Phones is same and is different from that of limited mobile services. The FWTs covered by one or sometime more than one Base Trans-receive Stations (BTSs). M/s TTSL further submitted tha....

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....uch services offered by M/s Tata Teleservices Ltd. does not conform to the scope and character of the fixed service and provide the character of Limited Mobile Service. Keeping in view the above, the competent authority has decided that such services are to be treated as limited mobile service within the scope of the licence. This is without prejudice to any other action that may be taken by the Government in this regard. Sd/- 26/8/05 (Sukhbir Singh) Director (BS-II) Tel. No.23036536 CC: 1. The Secretary, TRAI, Safdarjung Enclave, New Delhi. 2. Shri Rakesh Mehrotra, Chief Officer-Corporate Affairs, M/s Tata Teleservices Ltd., Indicom Building, 2-A, Old Ishwar Nagar, Main Mathura Road, New Delhi-110065." 38. Analysing the directive dated 4.3.2005 issued by TRAI, the point which arises for determination is whether such directive is clarificatory or amendatory. According to TRAI, it is clarificatory whereas according to the appellants it is amendatory. In this case, as stated above, we are concerned with the demand of ADC on the appellants for the period 14.11.2004 to 26.8.2005. According to the appellants, such a directive dated 4.3.2005 cannot operate r....

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....place in the generic requirement formulated as far back as 1996. They also find place in the Principles of Wireless Access formulated by ITU-RCA. Keeping in mind the definitions given both in the technical references as well as in the principles of wireless access formulated by ITU-RCA, it is clear that Premises Specific Restriction ("PSR") is not something new which stood evolved for the first time by circular dated 4.3.2005. In substance, PSR emanates from concepts, which are well known in telecommunications, both in technological references as well as in terms of generic requirements and in terms of principles of wireless access. We may state that broadly FWA is called WLL(F). As stated above, the UAS Licence refers to three types of wireless services, namely, full mobility, limited mobility and FWA. As stated, in FWA, the location of the end-user (Walky) and the network access point (antenna connected to the end-user) are both fixed whereas in the case of mobile wireless access, the location of the end-user is mobile. WLL(M) is a hybrid between FWA and MWA. Wireless access may be considered from many perspectives. In this case, we are concerned with mobility capabilities of the....

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....templated by UAS Licence which is dated July, 2003, therefore, much prior to circular dated 4.3.2005 these concepts were known to all access providers right from 2003. Therefore, the said circular cannot be called as amendatory. It is purely clarificatory in nature. 43. Thirdly, as stated above, in this case we are concerned with regulatory regime. ADC is a levy. Its levy depends on mobility as a service feature. As stated above, the numbering plan, radio frequency etc. are all important elements of a network. The numbering levels for fixed wireless services and for WLL(M) services are different. So also the numbering levels for fixed wireless service, limited mobility service and full mobility service are different. The identification of the call whether originating from mobile or from Walky or FWA has a correlation with the numbering plan which is an important element of the network of the appellant in its MSC. For levy of ADC, integrity of numbering plan is very important. In the present case, TRAI has detected that the appellant is providing WLL(M) service in the garb of fixed wireless phone service (FWA) which disturbs the integrity of the numbering plan. It is important to....

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.... Nomadic devices are placed at a certain location for a limited duration of time and then moved to a different location. Laptops are typical example of nomadic devices. (iii) Low Mobility: Cordless phones are typical example of low mobility. 45. The point to be noted is that in the licence we have three types of wirelss services, namely, limited mobility, full mobility and FWA. IUC levies the charge based on this classification. ADC is a part of IUC. ADC is also levied under IUC Regulation, 2003. In the case of Walky, the instrument can be put in the car, it can be carried throughout SDCA and Walky calls can originate not only from the subscriber's premises but it can also originate from any point in the SDCA. Because of this mobility, it is classifiable in the category of limited mobility. As stated above, in the case of FWA [WLL(F)] there is no mobility of the user device. When there is no such mobility of the user device, it is similar to all wired communications. Therefore, FWA is categorized as WLL(F). All wired communications can also fall in WLL(F) for the purposes of levy of ADC. However, since the user device in the case in hand is mobile throughout SDCA, th....

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.... Mr. Arun Jaitley, learned senior counsel for the appellant, on the issue of Unilateralism submitted that when the question whether portable WLL(F) Phones should be treated alike as WLL(M) phones was pending before TRAI pursuant to complaints from BSNL dated 4.1.2005, was it open to TRAI to issue a directive as is done in this case on 4.3.2005 without waiting for a Determination by the Competent Authority. In this connection reliance was placed on paras 2.26 and 2.27 of the Consultation Paper. We find no merit in this argument. As stated above, directive dated 4.3.2005 is clarificatory and not amendatory. The context in which the Consultation Paper emanated has been explained by us in our Judgment in the Civil Appeal of Reliance Infocomm Ltd.. We do not wish to repeat the reasons herein once again. In any event, we have looked into technology aspect and policy framework for levy of ADC hence there is no unilateralism as alleged by the appellant. 49. Before concluding, one aspect needs to be mentioned. It is alleged by the appellants and also by Reliance Infocomm Ltd. in the conjoint appeal which we will separately deal with in the subsequent judgment that BSNL have also not disc....