Telecom Reforms: Reducing Self-Imposed Barriers

 

Less restrictive regulations with better process discipline could improve broadband reach and functionality.

Shyam Ponappa   |   April 7, 2022 

Uncertainties with global supply chains are likely to persist even if geopolitical tensions ease in the coming months. With India’s dependence on energy imports of oil, gas, nuclear fuel, and materials such as cobalt, lithium and nickel for solar cells and batteries used in communications and information technology equipment and electric vehicles, we need to dedicate more focus and serious effort to fending for ourselves where possible over the longer term.

The ongoing processes of strategy formulation, execution and resource allocation necessarily involve trade-offs in choosing where and how to allocate time, capital, and human resources. In this context, advocates for services over manufacturing, or freewheeling opportunism, or those against performance-linked incentives (PLI) for manufacturing, may be glossing over the fact that our size and circumstances make for imperatives that could have been different if we were a smaller country, or at a different stage of development, but ultimately, only if it were a kinder and tidier world. Retaining a degree of autonomy requires a level of security in essentials, including in defence, food, and other areas. Our stage and state of development are also often overlooked, especially when commentators don’t tailor solutions to fit the context of our facts, including the culture/s, processes, and institutions, or the lack of them.

Two conditions in particular that hamper our capacity for enterprise and productivity need redress, besides social disharmony. One is an unsystematic approach, lacking goal-oriented, integrated planning and end-to-end execution. The second is regulatory constraints, often in the form of legacy holdovers that have not been reformulated to meet our present and anticipated requirements.

An example of the consequence of unsystematic practices is stranded electricity generation projects, despite potential users without adequate power, because transmission and distribution have not been built into the project “solution” as a prerequisite. Another example is the state of our broadband and telecommunications services, where many users have unreliable or inadequate access, because end-use delivery has not been successfully configured. A third instance is our highways, for which impressive statistics contrast with the highly uneven experience in using some of them

The open secret, of course, and the most difficult part, is to have a dedicated, end-to-end plan for projects, with the linkages thought through and provided for and executed in their entirety to achieve effective delivery without being distracted by new leads and schemes. Given the way technology linkages have developed, communications and information technology are key drivers for all technologies and infrastructure, as well as many aspects of superstructures. We sorely need pervasive, reliable, well-functioning networks. The criteria of good delivery and efficiency require policy reforms regarding the way spectrum is assigned, used, and paid for, how it is regulated for operator access, and how all network resources are optimally utilised for user benefit. That is the task, starting from where we are, with what we have.

For optimal service delivery, there are three aspects to the structure of our telecommunications requirements:

- The core network or backbone and skeleton,

- The distribution to user clusters beyond, and

- End-user connectivity within clusters.

At the first level, fibre networks are available in most urban and semi-urban centres, but in less than half of our gram sabhas or village-cluster centres. The criterion to be ensured is network quality for delivery standards including up-time, not just nominal connections. Rural coverage perhaps needs to be tackled systematically in sections, with realistic time frames and budgets, unalloyed by electioneering grandstanding and exaggerated claims that emphasise announcements over delivery and performance.

The second level is the extension and distribution of links from existing fibre networks within cities, and to villages in each cluster. Given continuing difficulties in completing the BharatNet fibre network to the numerous village clusters that don’t have fibre connections, a possible way to bridge this gap may be to enable and use high-capacity wireless links. Policies facilitating the use of viable wireless means do not exist even as these could improve network reach and functionality. Appropriate changes could enable the use of spectrum bands such as 60 GHz and 70-80 GHz for point-to-point fronthaul, mid-haul and backhaul. Six GHz could be enabled for high-speed Wi-Fi. Financial viability could be evaluated using modelling and simulation exercises.

Perhaps wireless links up to several kilometres to gram sabhas also need to be considered in place of fibre which has not been possible to install for years on end. In more remote cases, the use of satellite links may be a necessary expense, with the likely availability of such links with recent changes in policies. The third level needs a combination of fixed and wireless end-of-middle-mile links, with cellular or Wi-Fi user access.

Given the legacy of colonial-era laws, a conscious, imaginative effort may be useful, such as the use of a negative list as in trade agreements of prohibited items, with the rest open to consideration by due process when sought by service providers. This would enable, for instance, industry representatives mooting the consideration of 12 GHz for Wi-Fi going forward, on the lines of developments in the US, the European Union, or the UK.

For equipment and solutions, there is a product-and-services aspect for global as well as local markets that is much larger, which involves manufacturing and integrating services to deliver solutions. These avenues are closed off to our talent and enterprise because of our regulations. These regulations hamper us needlessly, forcing us to constrain ourselves in ways that other nations do not restrict their people. Enabling policies could remove these constraints, so that research, development and experimentation are facilitated for our vast talent pool. There is no other way in which we can hope for domestic production for local markets, for instance in wireless equipment, without prohibitive levels of imports.

If we have rapid facilitation of controlled trials and testing by authorised industrial and academic institutions, active development and proliferation of devices would be possible here. This would enable the design, development, and production of solutions for local use, as well as for the much larger global markets, e.g., for 5G applications, for which there is no domestic market yet.

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Shyam (no space) Ponappa at gmail dot com

Disclosure: The writer is associated with proposed wireless trials.

Productivity & Regulatory Constraints [Opportunities for the Left?]

Shyam Ponappa / New Delhi February 01, 2007

Productivity, Regulatory Constraints & the Left: Could a workable form of Social Democracy evolve in India?

Regulatory Constraints

In my previous column, I mentioned a McKinsey report about how fixing India's regulations could improve productivity by 61 per cent. The figure below shows their estimate of how much poor regulation constrains productivity.

Source:
http://www.mckinseyquarterly.com/article_abstract.aspx?ar=1612

Constructive Opportunities for the Left?

Despite its record, the Left in India today has unprecedented scope for influencing constructive change, while substantially enlarging its constituency. The Left's reorientation away from adversarial class war was the second of four change areas identified in my previous article, with the government's need to change from ruler to facilitator being the first. In West Bengal, the Left has already initiated some difficult constructive steps to revive economic growth. CPI (M) General Secretary Prakash Karat reportedly says that their challenge is to achieve economic development in a manner that benefits the people. Their potential for positive influence far exceeds the ambit of the states where the Left has a majority. However, to realise this, the Left will probably have to realign itself to develop a kind of social democracy in India.

This scope for influencing policy has come about because fractious politics ensures that we will have extensive coalitions in power, with the Left having a significant role for better or worse, whether as participants, supporters, or in the opposition. While the Left can obstruct, disrupt, or hold back through confrontation as in the past, its capacity to influence actions in the broad public interest is now unprecedented, provided there is a conscious evolution towards a broad, inclusive social democracy. This is because other parties -- the Congress, the JD, and the BJP -- have failed in developing appropriate systems and institutions that deliver the governance people could expect, i.e. in addition to law and order, the enabling and facilitating infrastructure that people need to be productive and have a reasonable quality of life. While necessary, the Left's realignment is not sufficient, as other stakeholders -- individuals as owners, workers/managers/professionals, politicians, and all members of society -- have to collaborate actively for a good composite outcome. Therefore, developments modelled on the balanced achievements of well-functioning social democracies, e.g., in the Scandinavian countries or the Netherlands, are likely to appeal not only to the Left's traditional constituents, but also to a broad set of liberals. Many in India are beginning to show a willingness to make efforts to improve their society and living conditions, rather than tolerate the filth and shoddiness that go with the inequities and disparities we have had so far. We need to develop this path that we don't yet have.

To realise its potential, the Left has to engage with society for inclusive constructive change. As in West Bengal, this means turning away from its historical role of advocating class conflict. Instead, the Left can help to evolve a form of social democracy that makes sense for India.

The areas that need radical change and require multipartisan efforts to engage in developing workable solutions for India's varying local circumstances are:

a) Works councils that are inclusive and collaborative as in the Netherlands, in place of confrontational unionism. Game theory posits that a collaborative outcome will always improve on a competitive approach, which results in the minimal Nash equilibrium (see "Tata's Corus Buy", Business Standard, November 3, 2006). The rationale is the same as for corporate alliances, e.g. Tata and Corus.

b) A more equitable solution to the acquisition of land for development. The Left could champion an approach based on the analogy of equity stakes in urban land development, e.g., tenants getting apartments on conversion to highrises. Similar principles can be applied to rural land acquisition, although the details of what is paid up-front as against continuing equity in the development will need some financial engineering. There is also a distinct need to ensure that compensation policies are effectively implemented.

c) A concerted long-term effort addressing the policy framework for enabling infrastructure. This needs a systematic makeover in every major aspect addressed, e.g., energy, communications, transportation, basic health including water and sanitation, and basic education. For each of these, the entire gamut needs to be made over, comprising an integrated system of policy aims with requisite laws, rules, procedures, practices, and institutions for execution and maintenance.

d) Getting It Right: We have to be honest with ourselves, rather than indulge in overeager self-congratulation (e.g., see Sunil Jain:* "...a host of regulatory decisions that have been one-sided, in areas like telecom especially..."). If you wonder that the rhetoric of several rounds of liberalisation resulted in such messy outcomes, it helps to scrutinise each step in the whole chain relating to a sector in each round to identify the flaws. It is good to see a glass as half-full, but not if we shortchange ourselves in setting up poor systems. These systems are like structures: build on political accommodation coupled with incompetence instead of economic logic, and the edifice collapses or is dysfunctional (imagine a massive physical edifice built on political compromise instead of engineering principles).

Quality of Life

If you are impressed with the telecommunications revolution in India, consider how much more effective countrywide broadband services would be for delivering everything from education to health care and entertainment, as well as marshalling productive capacities across our vast distances, to know what we are missing with our hodge-podge approach -- bad connections, slow speed, intermittent failure, even in Delhi. The policy and regulatory framework needs to be built with system integrity to be effective. This can greatly improve the ability of vast numbers of our people to access learning and health care, interact with each other, function productively, and contribute in manifold ways to efficiency and convenience, important aspects of the quality of life.

No political party or government has acted systematically to correct these shortcomings, neither in telecommunications, nor in any other sector -- except possibly the new Automotive Mission Plan 2006-16. The ultra mega power projects are one-offs for power; they do not address the absence of a systemic solution.

Could the Left channel its organisation and energies to provide this lead while seeking multipartisan inputs to raise our quality of life?

* 'Why have regulators?' Business Standard, January 22, 2007.

shyamponappa@gmail.com