Background :- The digital era is marked by its potentials and disruptions. The new children on the block such as Artificial Intelligence , nano-technology, 3d printing are still beyond the reach of our imagination. In this ever changing and ever evolving era, it is only natural that the rule books had to be taken a deeper revisit and restructuring. And it is more so true for regulators and regulations. For starters, it is a good idea because we should not be left with “Analog” regulators in this “digital” age.
Details:-
Telecommunications is one sector where the changes have been disruptive and innovative, covering a wide range of services far removed from the traditional fixed-line telephones—the natural monopoly segment associated with the sector.
The telecommunication sector now includes networks, internet services, virtual markets, the Internet of Things, cloud computing and the entire gamut of services using the information highway with innovative approaches to combining voice and data. It is the digital space of virtual markets that promises growth to Indian start-ups and multifold benefits to consumers.
Should this sector come under the purview of the Telecom Regulatory Authority of India (Trai) or the Competition Commission of India (CCI)? Or should it be left to the market, with regulation limited to safety and dispute resolution mechanisms for consumers? After all, inappropriate intervention by any regulator can sound the death knell for the sector.
Trai’s attempts at repositioning itself in the new dynamism of markets has seen it come out with consultation papers, most recently on fixing retail tariffs. These are positive developments that should provoke wider discussion. Unfortunately, Trai, like all regulators, is caught between an archaic legislation and a sector that defies legal confines.
“Forbearance”, or distancing from fixing retail tariffs, is the new principle that Trai plans to follow. Under the suggested dispensation, telecommunications service providers (TSPs) will be free to fix their retail tariffs and are only required to comply with a list of conditions that emphasize transparency, consistency and clarity.
However, Trai seems compelled by Section 11(2) of the Trai Act to bring in two principles of tariff fixation. Even more surprising is the choice of non-discrimination and predation as principles of tariff fixation.
As ex-post facto outcomes, the two principles, fixed on an ex-ante basis, will fail to capture the benefits of a nuanced dynamic pricing policy that the sector is currently witnessing. Instead, TSPs such as Bharti Airtel Ltd, Vodafone India Ltd, Reliance Jio Infocomm Ltd, Mahanagar Telephone Nigam Ltd (MTNL), Bharat Sanchar Nigam Ltd (BSNL) and other service providers may prefer to revert to the traditional staid pricing schemes, if only to avoid regulatory intervention.
Discriminatory pricing between consumer groups can be consumer-welfare enhancing while zero pricing need not necessarily be predatory, especially if the marginal costs are zero. Pricing decisions taken by firms are based on several factors, which include information of consumer consumption patterns and “willingness-to-pay”; their own long-run cost structures and the pricing strategies of competitors. Under competitive conditions, price discovery is by the market. The Trai Act structured in the economics of natural monopoly set within the framework of “principal agent” may not be able to appreciate dynamic pricing schemes.
As a licensed activity, the tail-end activity of TSPs also comes under the domain of Trai. Section 11(2) mandates Trai to fix tariffs for all licensed activity. Unease stems from the fact that Trai lacks both the expertise and the legal backing.
Meanwhile, CCI, under the Competition Act, has no powers to fix tariffs. It can only investigate allegations of abuse using the economic analysis of monopolistic competition facilitated by the right to private action (Section 19) unique to the Competition Act. This right vested with CCI provides access to private consumer information that is so essential in understanding discrimination or defining predation.
Further, the commission has the right to levy fines but Trai doesn’t. If Trai seeks powers for damage claims by way of subordinate legislation, it will only encourage firms to indulge in forum shopping to the disadvantage of new entrants and consumers.
If expertise and legal backing indicate that predatory pricing and discriminatory pricing are in the realm of CCI, it is equally important to see if the Competition Act constrains the CCI from assessing competition on the information highway.
The digital space of this highway has no boundaries between products and services and between nations at odds with traditional price-cost parameters of competition. Antitrust authorities are currently grappling with the following questions :
i) how to define the relevant product market when the product is free;
ii) how to demarcate geographic boundaries for viral networks that do not follow national boundaries;
iii) what constitutes predatory pricing or discrimination when prices are not charged purely on account of the fact that marginal costs are negligible within the framework of legal structures.
Emergent new metrics of competition fail to establish unequivocally the dominance of large entities and of abuse. The recent dismissal of the allegation of predatory pricing by CCI in the Bharti Airtel versus Reliance Jio case was on traditional measures of dominance. As in the case of the consultation paper, CCI’s decision is a welcome one. But does it provide comfort for intervening in future information markets? That said, it does provoke a rethink on prevailing regulatory Acts if regulators are to be effective in the markets of the future.
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- Lowering Emissions by Accelerating Forest Finance (LEAF) Coalition, a collective of the United States, United Kingdom and Norway governments, came up with a $1 billion fund.
- LEAF is supported by transnational corporations (TNCs) like Unilever plc, Amazon.com, Inc, Nestle, Airbnb, Inc as well as Emergent, a US-based non-profit.
- The world lost more than 10 million hectares of primary tropical forest cover last year, an area roughly the size of Switzerland.
- Ending tropical and subtropical forest loss by 2030 is a crucial part of meeting global climate, biodiversity and sustainable development goals. Protecting tropical forests offers one of the biggest opportunities for climate action in the coming decade.
- Tropical forests are massive carbon sinks and by investing in their protection, public and private players are likely to stock up on their carbon credits.
- The LEAF coalition initiative is a step towards concretising the aims and objectives of the Reducing Emissions from Deforestation and Forest Degradation (REDD+) mechanism.
- REDD+ was created by the United Nations Framework Convention on Climate Change (UNFCCC). It monetised the value of carbon locked up in the tropical forests of most developing countries, thereby propelling these countries to help mitigate climate change.
- It is a unique initiative as it seeks to help developing countries in battling the double-edged sword of development versus ecological commitment.
- The initiative comes at a crucial time. The tropics have lost close to 12.2 million hectares (mha) of tree cover last year according to global estimates released by Global Forest Watch.
- Of this, a loss of 4.2 mha occurred within humid tropical primary forests alone. It should come as no surprise that most of these lost forests were located in the developing countries of Latin America, Africa and South Asia.
- Brazil has fared dismally on the parameter of ‘annual primary forest loss’ among all countries. It has lost 1.7 mha of primary forests that are rich storehouse of carbon. India’s estimated loss in 2020 stands at 20.8 kilo hectares.
- Between 2002-2020, Brazil’s total area of humid primary forest reduced by 7.7 per cent while India’s reduced by 3.4 per cent.
- Although the loss in India is not as drastic as in Brazil, its position is nevertheless precarious. For India, this loss is equivalent to 951 metric tonnes worth carbon dioxide emissions released in the atmosphere.
- It is important to draw comparisons between Brazil and India as both countries have adopted a rather lackadaisical attitude towards deforestation-induced climate change. The Brazilian government hardly did anything to control the massive fires that gutted the Amazon rainforest in 2019.
- It is mostly around May that forest fires peak in India. However, this year India, witnessed massive forest fires in early March in states like Odisha, Uttarakhand, Madhya Pradesh and Mizoram among others.
- The European Union’s Copernicus Atmospheric Monitoring Service claimed that 0.2 metric tonnes of carbon was emitted in the Uttarakhand forest fires.
- Implementation of the LEAF Coalition plan will help pump in fresh rigour among developing countries like India, that are reluctant to recognise the contributions of their forest dwelling populations in mitigating climate change.
- With the deadline for proposal submission fast approaching, India needs to act swiftly on a revised strategy.
- Although India has pledged to carry out its REDD+ commitments, it is impossible to do so without seeking knowledge from its forest dwelling population.
Context:-
At the recently concluded Leaders’ Summit on Climate in April 2021, Lowering Emissions by Accelerating Forest Finance (LEAF) Coalition, a collective of the United States, United Kingdom and Norway governments, came up with a $1 billion fund plan that shall be offered to countries committed to arrest the decline of their tropical forests by 2030.
[wptelegram-join-channel link=”https://t.me/s/upsctree” text=”Join @upsctree on Telegram”]What is LEAF Coalition?
Why LEAF Coalition?
Brazil & India
According to the UN-REDD programme, after the energy sector, deforestation accounts for massive carbon emissions — close to 11 per cent — in the atmosphere. Rapid urbanisation and commercialisation of forest produce are the main causes behind rampant deforestation across tropical forests.
Tribes, Forests and Government
Disregarding climate change as a valid excuse for the fires, Indian government officials were quick to lay the blame for deforestation on activities of forest dwellers and even labelled them “mischievous elements” and “unwanted elements”.
Policy makers around the world have emphasised the role of indigenous tribes and local communities in checking deforestation. These communities depend on forests for their survival as well as livelihood. Hence, they understand the need to protect forests. However, by posing legitimate environmental concerns as obstacles to real development, governments of developing countries swiftly avoid protection of forests and rights of forest dwellers.
For instance, the Government of India has not been forthcoming in recognising the socio-economic, civil, political or even cultural rights of forest dwellers. According to data from the Union Ministry of Tribal Affairs in December, 2020 over 55 per cent of this population has still not been granted either individual or community ownership of their lands.
To make matters worse, the government has undertaken systematic and sustained measures to render the landmark Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006 ineffective in its implementation. The Act had sought to legitimise claims of forest dwellers on occupied forest land.
Various government decisions have seriously undermined the position of indigenous people within India. These include proposing amendments to the obsolete Indian Forest Act, 1927 that give forest officials the power to take away forest dwellers’ rights and to even use firearms with impunity.
There is also the Supreme Court’s order of February, 2019 directing state governments to evict illegal encroachers of forest land or millions of forest dwellers inhabiting forests since generations as a measure to conserve wildlife. Finally, there is the lack of data on novel coronavirus disease (COVID-19) deaths among the forest dwelling population;
Tardy administration, insufficient supervision, apathetic attitude and a lack of political intent defeat the cause of forest dwelling populations in India, thereby directly affecting efforts at arresting deforestation.
Way Forward
Tuntiak Katan, a global indigenous leader from Ecuador and general coordinator of the Global Alliance of Territorial Communities, aptly indicated the next steps at the Climate Summit:
“The first step is recognition of land rights. The second step is the recognition of the contributions of local communities and indigenous communities, meaning the contributions of indigenous peoples.We also need recognition of traditional knowledge practices in order to fight climate change”
Perhaps India can begin by taking the first step.