Give the regulators a chance

Regulator bashing appears to be everyone's favourite pass time these days. A power cut and one hears about ? for the next few weeks, at least ? the "bad job" being done by the electricity regulator. Any increase in telephone tariffs, and everybody is out to run down the telecom regulator. There is no denying that it is necessary to keep the regulators on their toes, but are anti-regulator crusades the only way? Is it fair to judge a regulator on the basis of one action? Does it (the one action) make a regulator anti-consumer? Does it rewind the wheel of reforms, undoing all earlier successes? Agreed, the need of the hour is to keep a check on regulators and bring in more accountability, transparency and efficiency. But do checks and balances mean pursuing relentless anti-regulator campaigns? Recent experience has shown that regulators form the perfect punching bags for all. Also, this bashing is not confined to any particular area; all regulators ? including power and telecom ? are victims of it. Considering the competitive and market developments, the Telecom Regulatory Authority of India (TRAI) attempted the important task of tariff rebalancing. The new tariffs and interconnect and usage charges (IUC) were announced by TRAI in January. Since then, the telecom regulator has been the target of all and sundry. What everyone has noted is that local call charges have increased. The PCOs ? an important source of employment ? are under threat. Also, the new tariffs are an impediment to connectivity. What no one seems to have noted is that the access deficit in the telecom sector, or the excess of costs over revenues from rental and local calls, is around one-third of the annual revenue; that if service providers cannot recover their costs, it will be the death of all reform. Analysts and self-proclaimed consumer activists will then be up in arms against the regulator citing how it has failed to facilitate competition and protect the health of service providers. But that is another story. The state-owned utilities have rolled back the new tariffs. The regulator continues to be the sitting duck. Why do we love to run down institutions that we ourselves create? What do we ourselves trample their credibility and legitimacy? Why is this going unnoticed? Another case in point is that of the Delhi power regulator. The Delhi Electricity Regulatory Commission (DERC) has not only been accused of favouritism and bias towards the private power distribution companies, but also for the slow progress of privatisation in the State. Some critics have even remarked that the change to privatisation has neither reflected a transparent tariff structure nor into efficiency improvements in the functioning of the DVB, or the distribution companies (DISCOMS). Contrary to these allegations are the results of a recent survey in which 77 per cent of the respondents said the power situation in Delhi has improved. Was not consumer satisfaction one of the reasons for privatising power? If that objective is being met, why is the regulator being targeted? Further, the decision to privatise was that of the State and not of the regulator's. As per the Aggregate Revenue Requirements filed with the DERC for 2002-03 and 2003- 04, the DISCOMS have managed to achieve the Aggregate Technical and Commercial (AT&C) loss reduction targets set for them as part of the privatisation process. What has been unnoticed is that the regulator has maintained its dignity and silence. It is easy for regulators to go public with explanations and countercriticisms too. Were the regulators to do that, they will be labelled populist and accused of seeking public sympathy. It is important to realise that one-sided views on the regulators' activities will isolate them from the consumers ? the ultimate beneficiaries of the reform process. Keeping this in mind, the so-called watchdogs of consumer interest should move away from cynicism, mistrust and indifference to what is healthy and wholesome. They should search for ways to introduce debate and discussion to bring about improvements. Let us not forget that a regulatory institution is only as good as it is made out to be. It is the people who strengthen the regulators and their ability to drive the sector towards better performance. Regulators have to cope with various issues in the course of the reform process. For regulators, or for that matter for anybody, there is really only one way to learn how to do something and that is by doing it. Give them time and a chance. After all, they are not anti-people. But their mandate is not to undertake populist decisions only. They have to act in the long-term interests of all. They have to act in a manner that helps the nation derive benefits from services, such as power and telecom, for years to come.