Regulators: Who is better and why?

Is telecom performing better than power? A sharper question: Is the telecommunications regulator performing better than the electricity regulator? Or is the opposite true? Why is there a general perception of one regulator not performing as well as the other or as well as it is expected to? Is it due to our ignorance of the issues that the regulators deal with or is there a sound basis for the same? These perceptions are generally based upon what is reported by the media, which might be selective and may consist only of aspects that affect the people directly, say, tariff and quality of service. In the absence of any established practice of measuring performance and communicating the same, how do regulators get across on what they do and how well they do it? Going by what experts in productivity improvement and performance measurement (David N. Ammons, Professor of Public Administration and Government in the University of North Carolina) have to say, "what gets measured gets done", there is definitely a need for, and some merit in, looking into the aspect of measuring and then projecting the performance and achievement levels. We still have a long way to go in regulatory practice in India. The independent regulatory authority for electricity was established in the mid-1990s closely followed by the telecommunications sector. They bodies have since then addressed various issues like tariffs, competition and consumer protection. These regulatory bodies are envisaged to be independent of the government machinery and hence they are not under the direct supervision of any organisation. However, accountability is imperative to make regulators perform in a particular manner which is responsive to all those who are directly or indirectly impacted by their actions. The question that comes to mind is who are the regulatory bodies answerable and accountable to? Parliament and the judiciary. Yes, but occasionally. On a regular basis? To none. So, then, who keeps a tab on the functioning of the regulatory bodies and how? In the absence of any established procedure for regulatory oversight, some would suggest a `super-regulator' to oversee individual regulators in different sectors. This is probably not possible because it goes against the basic tenet of their independence. Maybe the solution lies in a comparative analysis of regulatory performance. In this respect one can consider the tool of benchmarking, which looks outward to find best practices and high performance. It measures actual operations against the practices and subsequently internalises them for self-benefit. It is also a highly respected practice followed in the business world and there is no reason why the same cannot be used in this context. Such an attempt is expected to channel the efforts of regulators towards improvements in regulatory content and governance. Regulatory benchmarking would enable the review of the regulatory position and create a system of regulatory competition and commitment. This would also provide regulators with an opportunity to explain their actions ? both proactive and reactive; commissions and omissions in so far as they significantly affect the various stakeholders. However, regulatory benchmarking, like performance measurement, is not expected to lead to a direct improvement in performance. It is merely a tool to identify performance adequacies and deficiencies and cannot explain the reasons or propose any kind of solutions to these. The intention here being not to control the actions of these regulatory bodies but to gauge the extent of incorporation of the principles of good governance in regulatory practice. To encourage this, regulatory bodies can be assessed on their performance on the generally acceptable principles that govern regulatory actions, which besides many others, include transparency, accountability, consistency, stakeholder involvement and a targeted proactive approach. The concept of regulatory benchmarking is new for the regulatory bodies in the country, however, regulatory networks abroad do anticipate regulatory benchmarking as part of their activities in the future. The African Telecommunications Regulators' Network (ATRN) is anticipating benchmarking of regulators on specific regulatory topics as a part of its future activities. Since regulatory bodies in India are not mandated to perform such an exercise, some regulators may be satisfied in maintaining a status quo and not comparing with other similar agencies. One would therefore want to look at the option of inculcating it as a part of the regulatory habit. It is recognised that in the absence of any incentives for the regulator to undertake such an errand, an alternative to the statutory provision is the exertion of the influence of the various fora of regulators towards the incorporation of the benchmarking, as a measure of the principle of good governance, in regulatory practice. It is emphasised that the need for such a comparative ranking should be motivated not by the desire for publicity or praise but instead by a yearning to improve performance. This exercise of benchmarking regulatory bodies need not be restricted only to the infrastructure sectors. The possibility of extending this to other regulators like IRDA, SEBI etc. can also be explored. Benchmarking is expected to provide for a 'sounding board' for the regulatory bodies. On the issue of regulatory reform, the developed countries were amongst the first ones to identify the need for and establish independent regulators. The developing and transition economies have also taken after the option in a big way. The need of the hour is to go beyond where we stand today and adopt a proactive approach, lest we once again be relegated to the background picking up threads when it is really too late.