The Telecom Regulatory Authority (Trai) is reportedly working out a new access deficit regime for international long distance calls. If so, it is barking up the wrong tree. While a reduction in a questionable charge is welcome, sound policy calls for more than just tampering with the quantum. It is small comfort that Trai has officially acknowledged that the present access deficit charge (ADC) on all telephone calls are too high and will be reduced shortly. But it is not enough. As we have said in these columns earlier, the ADC regime in its present form must be given a speedy burial.
Trai had said as much in more than one of its earlier assessments, which favoured a change to a
revenue-share mechanism for implementing the ADC. It noted the current method „is complex, dependent on distance and whether the call is
inter-circle or
intra-circle…(and) creates an incentive to misreport the category of calls.“ More important, there is no clear categorisation of the loss to BSNL from rural telephony. Phone companies have no incentive to check the origin of any call terminating on their network, since regulations do not allow them to negotiate the rate they get for this.
Ironically, this is despite the fact that we already have a universal service obligation (USO) fund, financed by levies on all carriers, which is meant to subsidise rural telephony. A disbursement mechanism from the kitty is in place. There is no reason why the expenses meant for paying the ‘access deficit’ cannot come entirely out of the USO fund, by merging ADC with the latter. Trai had itself made such a suggestion last year, saying a USO-like revenue share represents a big improvement over the current per-minute ADC. The reason is that it removes the incentive to pass off calls originating from abroad as local ones. Remember, it is precisely on this point that BSNL and MTNL have taken Reliance to court. A flat revenue-share-based levy would certainly be far better than having one with such divergence — from 30p to 80p on national long-distance calls to Rs 4.25 on international ones.
The point is, if something has to be subsidised from levies on private parties, the charge should be simple and transparently administered. And it most certainly must not be big enough to create an incentive to avoid paying. Where the money is going and how should also be clear. The present per-call ADC fails the test: there are inherent incentives to conceal matters at more than one point, the charges are regarded as too high, the mechanism is dispute-prone. Having just one subsidy kitty and financing it with a simple levy on revenue, as with the USO fund, is far better.
