The Ministry of Communications has sought clarity from the Telecom Regulatory Authority of India (TRAI) on whether telecom operators' bank guarantees (BGs) can be encashed to recover fines imposed for their failure to curb spam. This follows TRAI's unprecedented recommendation to encash BGs for penalties amounting to Rs 141 crore, which remains unrealised, according to an ET report.
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Regulatory Gaps in Penalising Telcos for Spam
"Since this is the first time that such a situation has arisen, we have to see how we can proceed on this issue," the report quoted an official as saying.
An official reportedly explained that no specific license clause addresses penalties for unsolicited commercial communications (UCC). While TRAI has issued Telecom Commercial Communications Customer Preference Regulations (TCCCPR) to check spam, there are no provisions in the licence wherein the DoT can penalise telcos.
Existing quality-of-service (QoS) rules focus on network performance rather than consumer behaviour. Without clear provisions, any move to encash BGs could face legal challenges from telcos, as BGs are typically reserved for unpaid statutory payments.
"Spam is related to consumer behaviour and there are many stakeholders in the ecosystem, so it’s not entirely focused on telcos," the report quoted a second official as saying.
"If DoT issues a notice to encash BGs of telcos for not curbing spam, it will certainly be challenged by the telcos as this is not in the rules," a third official added, according to the report.
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Challenges of Enforcing Penalties
TRAI has penalised telcos for spam but contends that operators should recover fines from telemarketers. However, enforcement is difficult as telemarketers frequently switch operators, leaving telcos without effective control. Experts warn that encashing BGs could hurt telecom firms' credit profiles.
TRAI’s Plans Consultation Paper
To address the regulatory gap, TRAI plans to issue a consultation paper proposing to bring telemarketers under its regulatory ambit. This would ensure shared accountability for spam across the ecosystem. Currently, telemarketers operate without oversight, contributing to rampant spam and financial fraud.
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The ministry will decide its next steps based on TRAI's response.
