# RELIANCE INFOCOMM LTD v. BHARAT SANCHAR

- **Citation:** [2008] 7 S.C.R. 201
- **Court:** Supreme Court of India
- **Decided:** 2008-04-30
- **Case number:** Civil Appeal No. 936 of 2006
- **Bench:** S.H. Kapadia, B. Sudershan Reddy
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/reliance-infocomm-ltd-v-bharat-sanchar-24667
- **Pages:** 34

## Headnote

Telecommunication Usage Charges Regulation, 2003:
S.2 (XXV/11) and Clarificatory Circular dated March 4,
2005, issued by TRAI:
Access Deficit Charges/Interconnection Usage Charges
A
B
c
- Levy of, on Wireless Local Loop (Mobile) Services -
Opposed by the licensee of Unified Access Service on ground
that fixed Wireless Service as used by it limited to one Base D
Transceiver Station, thus, classifiable as Wireless Local Loop
(Fixed) and falls under exception to such levy levy/demand -
Held: Access deficit is the difference between costs and local
calls as incurred by respondent in providing cordless services
to be funded through demand/levy of Access Deficit Charges
on licensee/services provider - TRA/ issuing Regulations and E
Explanatory memorandums specifying principles for such levy
- Categorization of services for levying a charge by way of
ADC/IUC is a matter of policy an,d revenue recognition and is
part of regulatory requirements - Service provider well aware
of distinction underlying between WLL(M) and WLL(F) in
F
connection with cellular service - The categorization of the
services into fixed wireline and wireless services with further
classification into fixed wireless Access and limited/full mobility
has been reflected in the Unified Access Service License
issued to appellant-licensee - Regarding chargeability of G
ADC/IUC, TRAI followed it by issuing regulation/Explanatory
memorandum and clarificatory circulars classifying the service
impugned as WLL(M) - Since service impugned is not capable
of complying with Premises Specific Restriction Test, it is
201
H
202
SUPREME COURT REPORTS
(2008] 7 S.C.R.
A WLL(M) and not WLL(F) - Hence the licensee is liable to pay
ADCllUC - Directions issued by Circular dated 4.3.2005 by
TRAI is clarificatory in nature and amendatory and by
prescribing in it Premises Specific Regulation TRAI did not
intend to reclassify WLL(F) service as WLL(M) - There is no
B retrospectivity involved in the case, therefore, ADC could be
changed with retrospective effect - No infirmity found in the
impugned order warranting interference by Supreme Court.
c
D
Words & Phrases:
'Base Transceiver Service', 'Fixed Wireless Access',
'House Location Registers', 'Mobility', 'Public Telephone
Network', 'Visitors Handover Location Register' in the context
of Telecommunication Usage Charges Regulations, 2003.
WLL(F) & WLL(M) - Distinction between - Discussed.
'Fixed Wireless Terminal' and 'Fixed Wireless Access'
- Distinction between - discussed.
The questions which arose for determination before
this Court in the present appeal were as to whether the
E Unlimited Cordless Service (UDS) as provided by the
appellant, the Licensee is classifiable as Wireless Local
Loop (Mobile)/WLL (M) service for the purpose of payment
of Assess Deficit Charges as held by the Telecom
Regulatory Authority of India in terms of Regulation
F (XX.VIII) of the Telecommunication Interconnection Usage
Charges Regulation 2003 or as to whether it is classifiable
as Fixed Wireless Phone Service (FWPS)/Fixed Wireless
Service (FWS) limited to one Base Transceiver Service
(BTS), a Wireless Local Loop (Fixed)/WLL(F) and,
G therefore, not liable to payment of Access Deficit Charges
as claimed by the appellant.
Dismissing the appeal, the Court
HELD: 1.1 Regulatory regime includes methodology
H for calculating access deficit. Access deficit is to be
RELIANCE INFOCOMM LTD. v. BHARAT SANCHAR
NIGAM LTD. & ORS.
203
funded through Access Deficit Charge (ADC). Access A
deficit has to be calculated according to a formula which
provides a reasonable return on the investment made, i.e.,
a return on capital employed. Interconnected Usage
Charges (IUC)/ADC is part of revenue regime. It is for TRAI
to consider the framework used for calculating IUC/ADC,
8
a subsidy. Access deficit essentially is to compensate
the difference between costs and local calls revenue.
(Para - 18) [220-E, F; 221-A]
1.2 From time to time, TRAI has issued Regulations.
These regulations a

## Text

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[2008] 7 S.C.R. 201
RELIANCE INFOCOMM LTD.
II.
BHARAT SANCHAR NIGAM LTD. & ORS.
(Civil Appeal No. 936 of 2006)
APRIL 30, 2008
(S.H. KAPADIA AND B. SUDERSHAN REDDY, JJ.)
Telecommunication Usage Charges Regulation, 2003:
S.2 (XXV/11) and Clarificatory Circular dated March 4,
2005, issued by TRAI:
Access Deficit Charges/Interconnection Usage Charges
A
B
c
- Levy of, on Wireless Local Loop (Mobile) Services -
Opposed by the licensee of Unified Access Service on ground
that fixed Wireless Service as used by it limited to one Base D
Transceiver Station, thus, classifiable as Wireless Local Loop
(Fixed) and falls under exception to such levy levy/demand -
Held: Access deficit is the difference between costs and local
calls as incurred by respondent in providing cordless services
to be funded through demand/levy of Access Deficit Charges
on licensee/services provider - TRA/ issuing Regulations and E
Explanatory memorandums specifying principles for such levy
- Categorization of services for levying a charge by way of
ADC/IUC is a matter of policy an,d revenue recognition and is
part of regulatory requirements - Service provider well aware
of distinction underlying between WLL(M) and WLL(F) in
F
connection with cellular service - The categorization of the
services into fixed wireline and wireless services with further
classification into fixed wireless Access and limited/full mobility
has been reflected in the Unified Access Service License
issued to appellant-licensee - Regarding chargeability of G
ADC/IUC, TRAI followed it by issuing regulation/Explanatory
memorandum and clarificatory circulars classifying the service
impugned as WLL(M) - Since service impugned is not capable
of complying with Premises Specific Restriction Test, it is
201
H
202
SUPREME COURT REPORTS
(2008] 7 S.C.R.
A WLL(M) and not WLL(F) - Hence the licensee is liable to pay
ADCllUC - Directions issued by Circular dated 4.3.2005 by
TRAI is clarificatory in nature and amendatory and by
prescribing in it Premises Specific Regulation TRAI did not
intend to reclassify WLL(F) service as WLL(M) - There is no
B retrospectivity involved in the case, therefore, ADC could be
changed with retrospective effect - No infirmity found in the
impugned order warranting interference by Supreme Court.
c
D
Words & Phrases:
'Base Transceiver Service', 'Fixed Wireless Access',
'House Location Registers', 'Mobility', 'Public Telephone
Network', 'Visitors Handover Location Register' in the context
of Telecommunication Usage Charges Regulations, 2003.
WLL(F) & WLL(M) - Distinction between - Discussed.
'Fixed Wireless Terminal' and 'Fixed Wireless Access'
- Distinction between - discussed.
The questions which arose for determination before
this Court in the present appeal were as to whether the
E Unlimited Cordless Service (UDS) as provided by the
appellant, the Licensee is classifiable as Wireless Local
Loop (Mobile)/WLL (M) service for the purpose of payment
of Assess Deficit Charges as held by the Telecom
Regulatory Authority of India in terms of Regulation
F (XX.VIII) of the Telecommunication Interconnection Usage
Charges Regulation 2003 or as to whether it is classifiable
as Fixed Wireless Phone Service (FWPS)/Fixed Wireless
Service (FWS) limited to one Base Transceiver Service
(BTS), a Wireless Local Loop (Fixed)/WLL(F) and,
G therefore, not liable to payment of Access Deficit Charges
as claimed by the appellant.
Dismissing the appeal, the Court
HELD: 1.1 Regulatory regime includes methodology
H for calculating access deficit. Access deficit is to be
RELIANCE INFOCOMM LTD. v. BHARAT SANCHAR
NIGAM LTD. & ORS.
203
funded through Access Deficit Charge (ADC). Access A
deficit has to be calculated according to a formula which
provides a reasonable return on the investment made, i.e.,
a return on capital employed. Interconnected Usage
Charges (IUC)/ADC is part of revenue regime. It is for TRAI
to consider the framework used for calculating IUC/ADC,
8
a subsidy. Access deficit essentially is to compensate
the difference between costs and local calls revenue.
(Para - 18) [220-E, F; 221-A]
1.2 From time to time, TRAI has issued Regulations.
These regulations are accompanied by Explanatory C
Memorandums. ADC has been specified differently in
these regulations for fixed, Wireless Local Loop (Mobile)
or WLL(M) and cellular mobile calls. In doing so, the TRAI
has kept in mind the fact that standard tariffs have been
fixed for fixed line calls. In terms of the Explanatory D
memorandum issued by it, ultimately the basic principles
underlying IUC/ADC regime has been laid down. One of
the important principles laid down is that ADC shall be
funded from all calls, except fixed to fixed, local etc.
(Para -18) [221-B, C, D]
E
1.3 Categorization of services for levying a charge
by way of IUC/ADC is a matter of policy and revenue
recognition and is the part of regulatory regime. If one
examines the various Regulations made by TRAI from
time
to
time,
including
Telecommunication F
Interconnection (Charges and Revenue sharing)
Regulation 2001, WLL(M) stood defined to mean limited
mobility telephony service using wireless in local loop
technology within a Short Distance Charging Area (SDCA).
In the matter of levy of ADC, the Explanatory G
" ~
Memorandums indicate that service providers are well
aware of what is WLL(M), what is WLL(F) and what is
cellular mobile service right from 2001. (Para - 20)
[221-G, H; 222-A, B]
H
204
SUPREME COURT REPORTS
[2008] 7 S.C.R.
A
1.4 Every service provider knew the difference
between fixed wireline and three types of wireless
services, namely, Fixed Wireless Access(FWA), limited
mobility and full mobility. Further, these three categories
of wireless services constitute a condition of Unified
B Access Service(UAS) licence. The categorization is done
in the UAS Licence dated 20.7.2001 and the follow up
regarding chargeability of IUC/ADC is done under the
Regulations made by TRAI. Therefore, no merit is found
in the submission of the appellant that by the circular
c dated 4.3.2005 TRAI has classified/reclassified the
impugned service as WLL(M). (Para - 21) [222-D, E, F]
2. The design of a wireless system does not only aim
to optimise performance for specific applications, but also
at reasonable cost. Therefore, economic factors impact
D the design for wireless system. When it comes to the
..
design of wireless systems and services one has to
distinguish between two different categories. "Systems"
where the mobility is of value by itself - e.g., in cellular
telephony. Such services can charge a premium to the
E customers - i.e., more expensive than wired systems. In
services, wireless access is intended as a cheap cable
replacement, without additional features. The classic
example of such service is Fixed Wireless Access (FWA).
Such system is cost-effective, as the infrastructure is
F cheaper than laying of new wired connection. The point
to be emphasized is that FWA is a service where wireless
access is intended as cheaper cable replacement without
additional features. Mobility is an inherent feature of most
wireless systems and has important consequences for
G system design. It is there in FWA, but if it exceeds the
premises of the subscriber for ADC purpose it becomes
classifiable as WLL (M). (Para - 23) [223-A-E]
••
3.1 The wireless systems differ in the amount of
mobility that they have to allow for the users. In cellular
H telephony, a mobile user communicates with a base
RELIANCE INFOCOMM LTD. v. BHARAT SANCHAR
205
'y
NIGAM LTD. & ORS.
station that has a good radio connection with the user. A
The base stations, however, are connected to Mobile
Switching Centre (MSC) which in turn are connected to
public telephone system. In the cellular principle, the area
served by a network provider is divided into cells. In
J. y
cellular telephony there is unlimited mobility. The user can
B
be anywhere within the coverage area of the network in
order to be able to communicate. He can move from one
cell to the other during one call. The cellular network
interfaces with Public Switched Telephone Network
("PSTN"). (Para - 26) [224-8, C, D, E]
c
3.2 FWA is a one type of wireless service. It is a
derivative of cordless phone, essentially replacing a cable
connection between the user and the public landline
system. In FWA there is no mobility of the user device. The
purpose of FWA lies in providing users with telephone and D
data connections without having to lay cables from its centrai
switching office to the office or premises of the subscriber FWA
has its market for covering rural areas which do not have
wired infrastructure. FWA is Wireless Access Application
in which the location of the end-user termination and the
E
network access point to be connected to end-user are
fixed. Therefore, what is WLL(F) was well known to the
service providers both in terms of technology and also
in terms of IUC Regulations. (Para - 27 & 29) [224-E, F;
226-A]
F
"Wireless Communications" by Andreas F Molisch -
referred to.
3.3 The payability of the ADC as per the Regulations
is directly related to the nature of the service and not i:o
G
the instrument. In case of FWA, the antenna in the
'*
instrument and the end-user termination point locationwise remains fixed. The network access point remains
connected to the end-user in FWA. (Para - 30} I226-8, CJ
4.1 In WLL(F) the telephone is the access point if the H
206
SUPREME COURT REPORTS
[2008) 7 S.C.R.
A antenna is in-built in the telephone. If the impugned
service is operable throughout SDCA it is WLL(M). In
WLL(F), location of end-user termination and the network
access point to be connected to the end-user are fixed. If
the impugned service cannot comply with PSR it is
B classifiable as WLL(M) for IUC, ADC, Numbering Plan etc.
The only difference between fixed wireline and WLL(F) is
that WLL(F) is a cheap cable replacement without additional
features. WLL(F) is limited to specific premises of the
subscriber or permanent location. (Para - 31) (226-E, F]
C
4.2 The Base Transceiver (BTS) is different from
Mobile Swicthing Centre (MSC} in terms of functionality.
The function of BTS primarily is confined to transmission
and communication. On the other hand, MSC is an
exchange. Two databanks exist in the MSC, namely, Home
D Location Register ("HLR") and Visitor Location Register
"VLR". HLR is a central data base that keeps track of the
location a user is currently at; the VLR is a data base
associated with a base station that knows all the users
that are currently within the coverage area of a specific
E base station. If a mobile station moves across a cell
boundary, a different base station becomes the serving
BS. In other words, the MS is handed over from one
base station to another without interrupting the call.
This process is known as "Handover''. (Para - 32) (226-G;
F 227-A, BJ
"Wireless Communications" by Andreas F. Molisch -
referred to.
5.1 In the instant case, this Court is basically
G concerned with the levy of ADC charge on a given call.
The identity of the call and the caller is checked not by
the base station but by the MSC. The Numbering plan is
also in MSC and not in the BTS. But with the
communication linkage between MSC and BTS.
H (Para - 32) [227-C]
'
...
RELIANCE INFOCOMM LTD. v. BHARAT SANCHAR
207
NIGAM LTD. & ORS.
5.2 The function of BTS is to receive the signals and A
forward the same to the MSC. MSC is the intelligent part
of the network. MSC has the registration of numbers to
be served by the service provider, the mechanism to
identify the caller is not with the BTS. HLR is the primary
;
database for all subscriber information, VLR is a network 8
.
.
entity whose main function is to provide service to
subscribers who are served from a different HLR. The
MSC communicates with the VLR to obtain subscriber
information to support call processing. The VLR gets its
information about visiting roamers from HLR. (Para - 32) c
[227 -F, G, H]
"Wireless Intelligent Networking" by Gerry Christensen,
Paul G. Florack and Robert- referred to.
5.3 Fixed Wireless Terminal (FWT) units differ from D
,_
conventional mobile terminal units operating within
cellular networks - such as GSM - as FWT or desk phone is
limited to a permanent location. (Para - 32) [228-A]
5.4 FWA is a service which is limited to permanent
location. The significance of FWA is that it dispenses with E
the last mile wireline connectivity and to that extent it is cost
effective. The wireless access point is a device that
connects wireless communication devices together to
form a wireless network. Wireless Access Point (WAP)
usually connects to a wired network. The term 'fixed F
.y
wireless' refers to the operation of wireless devices or
systems in fixed locations. (Paras - 32 & 33) [228-A, B, C]
'Encyclopedia .of Technology Terms' by Whatis. Com. -
referred to.
6.1 A network consists of several access networks, G
,. .:,.
which include the radio equipment that is necessary to
interconnect by the core network. (Para - 34) (228-F]
Location-Based Services-Fundamentals and Operations
by Axel Kupper; From WPANs to Personal NetworksH
208
SUPREME COURT REPORTS
[2008] 7 S.C.R
A
Technologies and Applications" by Ramjee Prasad and Luc
Deneire - referred to.
6.2 The main purpose of FWA is to provide network
access to buildings through exterior antennas
communicating with central radio base stations. (Para - 35)
B [229-B, C]
From WPANs to Personal Networks-Technologies and
Applications" by Ramjee Prasad and Luc Deneire - referred
to.
C
7 .1 There is no merit in the contention of the appellant
that ADC cannot be charged retrospectively. There is no
retrospectivity involved in the present case. The
classification of services was done under the UAS licence
and the chargeabilitylpayability was fixed under the IUC
o as far back as 2003. The reasons given both in terms of
technology and also policy framework are in addition to
the reasons given by TDSAT in its impugned judgment.
Hence no infirmity is found in the impugned judgment of
TDSAT. (Para - 36) [229-E, F, G]
E
7.2 No merit is found in the argument of the
appellant that mobility within one BTS is a category by
itself. If that argument is to be accepted it would amount
to carving out one more category of service which is
impermissible. In any event, it is technically not possible
F as it would deteriorate the quality of service. (Para - 37)
[229-G; 230-A]
7.3 In regard to the question as to whether ADC was
admissible for wireless access it may be stated that at one
point of time, the idea mooted was that all fixed service
G providers, including BSNL, were entitled to ADC. This was
one of the items on the Agenda on TRAI as per Para 2.26
of the consult::ition paper on Interconnecting Usage
Charge Review. If ADC was to be made admissible for
Fixed Wirnless services provided by all fixed service
H phones then the pricing of the product would become an
-·
...
RELIANCE INFOCOMM LTD. v. BHARAT SANCHAR
209
NIGAM LTD. & ORS.
item of dispute not only between cellular/mobile operators A
and fixed service providers but also inter se amongst fixed
service providers, i.e., between those who complied with
PSR and those who did not. In fact, but for PSR, the
T
difference between WLL(F) and WLL(M) would stand
•
obliterated. Therefore, TRAI referring to its directive dated B
4.3.2005 invited response from service providers to the
suggestion of the appellant that services need to be
located to a particular RF Sector of a base station. Inviting
such response cannot be construed as abandonment.
Moreover, the later correspondence indicates that even c
foreign experts nominated by the appellant have certified
that linkage to a particular RF Sector of the base station
would result in deterioration in the quality of the services
provided by the appellant. (Para - 41) [232-C-G]
..
7.4 The true test to differentiate between WLL(F) and D
WLL(M) services is: whether the impugned service of the
appellant is capable of being confined as far as its mobility
is concerned to the subscriber's premises. If not, the
impugned service is WLL (M) for levy of ADC. There is no
dispute that the impugned service, as far as its mobility is E
concerned, cannot be confined to the premises of the
subscriber. In other words, since the impugned service
is not capable of complying with PSR test it is WLL(M).
(Para - 41) [232-G; 233-A]
7 .5 It is true that the show cause notice dated F
15.1.2005 issued by TRAI was given in the context of
certain advertisements given in the newspaper by Tata
Teleservices Ltd. and by the appellant. However, vide the
show cause notice(s) the appellant was called upon to
explain why the impugned service is not considered to G
.
-~-
WLL(M). In fact, a reply was given to the show cause notice
by the appellant which indicates that the appe!lant clearly
understood the show cause notice and, therefore, gave
its explanation as to why the impugned service should
be treated as WLL (F) and why the impugned service H
210
SUPREME COURT REPORTS
[2008) 7 S.C.R.
A should not be categorized as WLL(M). Hence keeping in
mind the technology, the policy framework and the thrust
of the entire correspondence between TRAI, DoT and the
appellant it is very clear that the concept of FWA was well
known in the market and in the business right from 2003
B and in that light that the impugned circular dated 4.3.2005
of TRAI was clarificatory in nature and, therefore, the
demand of ADC as made by BSNL for the period
14.11.2004 to 26.8.2005 is valid in law and justified in terms
of the UAS licence. (Para - 42 & 43) [233-C-G]
C
7.6 The questions regarding quantification of the
amount are left open to be decided in accordance with
law at the appropriate stage by the competent authority.
(Para - 44) [234-A-B]
7 .7 No infirmity is found in the reasons given by
TDSAT in its impugned order. (Para - 44) [234-C]
CIVILAPPELLATE JURISDICTION: Civil Appeal No. 936
of 2006.
From the Judgment and order dated 17.1.2006 of the
Telecom Disputes Settlement and Appellate Tribunal, New Delhi
(TDSAT) in Petition No. 108 of 2005.
Gopal Subramanian, ASG, P.P. Tripathi, ASG, K.K.
Venugopal, J.J. Bhat, Rakesh Dwivedi, Dr. A.M. Singhvi, Anjali
Chandiyalker, Manali Singhal, K. Raj, Gopal Sanker Narayan,
Abhijat P. Medh, Maninder Singh, Pratibha M. Singh, Gaurav
Sharma, Suneet Bhatia, Surabhi Mehta, Yoginder Handoo,
Tejveer Bhatia, Sanjay Kapur, Shubhra Kapur, ~ajiv Kapur, Arti
Singh, Manjul Bajpai, Amit Bhandari, Arun Dhillon, Ritika Chawla,
Viraj Kadam, Navin Chawla and Anil Katiyar for the appearing
parties.
The Judgment of the Court was delivered by
KAPADIA, J. 1. This civil appeal is filed under Section 18
of Telecom Regulatory Authority of India Act, 1997 ("1997 Act")
' .
RELIANCE INFOCOMM LTD. v. BHARAT SANCHAR
211
NIGAM LTD. & ORS. [KAPADIA, J.]
by M/s Reliance lnfocomm Ltd. against judgment and order A
delivered by Telecom Disputes Settlement and Appellate
Tribunal ("TDSAT") dated 17.1.2006 dismissing petition No. 108
of 2005 challenging the directive dated 4.3.2005 by the Telecom
Regulatory Authority of India ("TRAI"), circulars dated 23.3.2005
.,,
and 26.8.2005 issued by DoT and demands raised by BSNL B
•
for ADC for the period 14.11.2004 to 26.8.2005.
2. The short question which arises for determination in this
civil appeal is whether "Unlimited Cordless" service" ("the
impugned service" for short) of the appellant is covered under
the definition of WLL(M) service as defined in Regulation c
2(xxviii) of the Telecommunication Interconnection Usage
Charges Regulation, 2003 which defines WLL(M) as limited
mobility service using WLL technology within Short Distance
Charging Area ("SDCA"). According to TRAI and DoT, fixed
wireless phones ("FWP")/fixed wireless service ("FWS") which D
operate beyond the subscriber's premises is classifiable as
WLL(M) service for the purpose of payment of ADC to BSNL
whereas, according to the appellant, FWS is limited to one base
transceiver station ("BTS") within which the service operates
and, consequently, this service is classifiable as WLL(F) and E
not as WLL(M).
Facts:
3. On 18.3.1997, appellant was granted licence by DoT
for providing basic services in Gujarat which included fixed
F
wireless services but which preferred wireless technology for
the subscriber local loop. On 20.7.2001 appellant was granted
·licence by DoT for providing basic services-Jn different service
areas in the country which included fixed wireline service and
limited mobile service. In November, 2003 appellant was G
permitted to migrate to the Unified Access Service Licence
·~
("UASL") which categorized wireless services into 3 categories,
viz., fixed wireless access ("FWA"}, limited mobility [WLL(M)]
and fully mobile service(s).
Submissions of Shri K. K. Venugopal, learned senior H
212
SUPREME COURT REPORTS
[2008] 7 S.C.R.
A counsel for the appellant:
4. According to the appellant, in November, 2003 appellant
was permitted to migrate to UASL under which appellant was
permitted to provide following services: (i) Fixed Wireless (ii)
B
FWA (iii) WLL(M) (iv) Fully Mobile Service. According to the
appellant, ever since its migration to the UASL, it has been
' 1
operating fixed services including FWAand full mobile services.
The appellant was not operating WLL(M). According to the
appellant, "limited mobile service" has been defined in UASi....
granted by DoT and in the iUC Regulation 2003 framed by TRAI
c under Section 11 of the 1997 Act as a service which enables
operations throughout a SDCA. At this stage, it may be noted
that the whole of Delhi is one single SDCA. That, appellant was,
therefore, operating its FWA service within the area of one Base
Transceiver Station (BTS).
D
5. According to the appellant a BTS is necessary wherever
there is a congested area, like Chandni Chowk where digging
•
for laying an optical fibre cable is not feasible and, in such a
case, a 8TS has to be set up where wireless link has to be
E
established between the telephone exchange and the BTS which
in turn could be accessed by teleph0ne receiver set through
Radio Frequency ("RF") signals. However, according to the
appellant, in the case of full mobile cellular services, several
BTSs. are required to be set up by Aach service provider in the
entire service area for transmitting signals to the terminals
F (handsets). That, these handsets are required to be aligned
electronically to a single BTS or the handset could access RF
signals from other base stations BTSs. from any part of the
SDCA. According to the appellant, in case of full mobility, the
signals are available in the entire service area (a telecom circle
G equivalent to a State). Therefore, according to ~he appellant,
fixed wireline service being a wireiine service alone stood
restricted to the subscriber's premises as is clearly understood
-< •
even under the UASL whereas Vl/LL(M) is defined specifically,
both in the UASL. as well as in the !UC Regulation 2003, as a
H service where mobility is restricted to the SDCA. That, in the
RELIANCE INFOCOMM LTD. v. BHARAT SANCHAR
213
NIGAM LTD. & ORS. [KAPADIA, J.]
..,,..
IUC Regulation 2003, FWA [WLL(F)] service has been treated
A
as part of the fixed services. Therefore, according to the
appellant, its "unlimited cordless" service ("impugned service"
for short) stood classified right from the inception as WLL(F).
According to the appellant, FWA service is a wireless service,
~
mobility is inherent in such services but that mobility is not meant
B
•
for the entire SDCA as in that event such mobility would fall in
the category of WLL(M) and, therefore, according to the
appellant, FWA service logically stands between a fixed wireline
service restricted to the subscriber premises and WLL(M) where
mobility is within the SDCA.
c
6. According to the appellant, the said logical concept was
known to OoT and TRAI right from inception, that the technical
and statutory authority understood the said concept with regard
to FWA clearly to mean as restricted to one BTS and that it is in
this context that the mobility of the appellant's phone is available
!)
in the restricted area of one BTS and not within the entire SDCA
That, this is the reason why even the DoT specifically inquired
from the appellant vide letter dated 31.1.2005 (in the context of
alleged violation of licence condition on account of certain
advertisements issued by the appellant) as to whether the
E
mobility of the appellant's phone stood limited to one BTS area
or whether it is available in the area outside one BTS. This letter
of OoT is relied upon by the appellant to show that right from
1997 upto 31.1.2005, Do T and TRAI understood FWA services
as having mobility limited to one BTS area alone. According to
F
-"
the appellant, it is in the above context that even the TRAI in its
Consultation Paper dated 17 .3.2005 categorically stated that
its intention was to permit mobility only within the ~overage :if
RF sector of one BTS, in the area where the subscriber is
registered and not to the areas which are covered by other base G
stations. According to the appellant, throughout the period 2003
.. .Itill 4.3.2005 its service was accepted as a fixed wireless access
service ("FWA service") and that only because of the
advertisement issued by the appellant in January, 2005 that
BSNL complained to the TRAI and to the OoT. The said
H
214
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[2008] 7 S.C.R.
A
advertisement was regarding Unlimited Cordless. According
to the appellant, TRAI called upon the appellant vide letter dated
6.1.2005 not to advertise its impugned FWA service as
"unlimited cordless". That in the said letter dated 6.1 .2005 TRAI
did not call upon the appellant to answer the question as to
B whether impugned service is available within the entire SDCA
or within one RF sector of BTS. According to the appellant, such
"
a question was not even raised by DoT in its letter dated
31 .1.2005 by which only a limited clarification on the "numbering
scheme" for the impugned service was asked for. That query
c was as follows:
"Whether fixed wireless terminal could be authenticated
by BTS terminals other than by BTS serving the location
of the subscriber as on 10. 1. 2005"
D
7. According to the appellant, the impugned letter of TRAI
dated 4.3.2005 is an aberration for the simple reason that having
accepted the impugned service as FWA as restricted to one
BTS, it directs all access providers to strictly ensure that the
terminal used for FWA confined to the subscriber's premises.
E
That, having said so, TRAI thereafter hastened to refer to a
question in the Consultation Paper of TRAI dated 17 .3.2005 in
which, after referring to the complaint of certain operators, TRAI
stated that it had asked all service providers on 4.3.2005 that
Fixed Wireless Terminals {"FWTs.") should provide services to
the subscriber at the fixed address only, the intention being that
F
these phones should not be in a position to offer mobility through
other base stations located in other parts of the city and that the
-:
impugned service needs to be allocated to a particular RF sector
of a single base station, otherwise issues of ADC and
comparison with limited or full mobility may take place. According
G to the appellant, the above statement of TRAI itself suggests
that FWA services are those which are limited to one BTS.
According to the appellant, therefore, even as late as 4.3.2005
...
TRAI understood the concept of FWA service as limited to one
base station within the SDCA. Therefore, according to the
H appellant, the decision of TRAI dated 4.3.2005 is an aberration.
RELIANCE INFOCOMM LTD. v. BHARAT SANCHAR
NIGAM LTD. & ORS. [KAPADIA, J.]
215
That the said decision was taken unilaterally and at the behest A
of BSNL without examining the merits of the contentions
advanced by the access providers like Reliance lnfocomm Ltd.
According to the appellant. it was a unilateral decision to confine
FWA services to the premises of the subscriber. According to
the appellant, in any event, when the matter was a part of the
B
Consultation Paper dated 17 .3.2005 it was not open to TRAI to
unilaterally issue such a direction restricting FWA services to
the premises of the subscriber.
8. According to the appellant, BSNL could not have made
demand on it for payment of ADC during the period 14.11.2004 C
to 26.8.2005 as it was admitted by TRAI and DoT that no ADC
is payable on FWA services. In this connection, according to
the appellant, one of the questions posed for consultation in
Para 2.7 was "what criteria should be determined with regard
to the range and portability/mobility of WLL(F)'s subscriber D
terminals". According to the appellant, the said query itself
indicates that the issue as to the range of portability/mobility of
WLL(F) was pending in the consultation process and, therefore,
BSNL could not have raised a demand on the appellant for ADC
when the matter was sub-judice. According to the appellant it is
E
this demand of BSNL which made the appellant move TDSAT
for settlement of dispute.
9. According to the appellant, circumstances mentioned
above clearly indicates that in 2005 upto 4.3.2005 both DoT
and TRAI understood FWA services as limited to one BTS and
F
the decision dated 4.3.2005 given by TRAI is a unilateral
decision imposing Premises Specific Restriction ("PSR") for
the first time at the behest of BSNL. Further, according to the
appellant, in the petition before TDSAT, the appellant has
specifically posed a vital question for consideration, namely,
G
.. ,
whether the impugned service provided by the appellant should
be restricted within one BTS and if so whether such service will
fall in the category of WLL(F) or WLL(M) service. According to
the appellant, TDSAT has not answered this question. Apart
H
216
SUPREME COURT REPORTS
(2008] 7 S.C.R.
A
from the said question, appellant had also raised other questions
such as whether the impugned directive of TRAI dated 4.3.2005
and the clarification dated 23.3.2005 by Do T for the first time
introducing the concept of SPR would amount to amendment of
the licence conditions without following the consultation process
B as stipulated under the 1997 Act. Similarly, one more question
'>
l
was also raised before TDSAT as to whether directive dated
4.3.2005 was legally valid. According to the appellant, none of
the said important questions have been answered by the
impugned decision of the TDSAT and. therefore, the said
c decision needs to be set aside. According to the appellant, the
said questions ought to have been decided by a statutory body
consisting of technical members, particularly to analyse the
above mentioned various submissions raised by the appellant.
10. According to the appellant, nowhere in the pleadings
iD of SSNL, the issue that a WLL(F) is a service where an antenna
is fixed at the top of the house connected by the wire to the
handset plugged into the wall has been raised. That the said
technology has not been discussed even by TDSAT in its
impugned judgment. According to the appellant, the literature
E on this point is confusing. That, there is no affidavit to support
the claim of BSNL that FWA service is one where an antenna is
fixed at the top of the house connected by wire to the handset
plugged into the wall and, therefore, this aspect needs to be
considered by a statutory body of technical members alone. In
'· F
this connection, appellant alleges that even today the affidavit
of BSNL do not answer the questions posed by the appellant
as to how many of their fixed wireless terminals were with the
roof-top antenna and what numbering plan was followed by BSNL
for their FWT and LL(M). Appellant alleges that an inference
~ may be drawn of admission on the part of BSNL that it had
! \.:l
16,00,000 fixed wireless terminals which are similar to the fixed
wireless telephones of the appellant as there is no denial
' '
regarding allegation made in this connection by the appellant
I
·11. Lastly, it is the case of the appellant that the levy of
H
RELIANCE INFOCOMM LTD. v. BHARAT SANCHAR
217
NIGAM LTD. & ORS. [KAPADIA, J.]
ADC is a matter of tax policy and, therefore, any provision relating
A
to a charge has to be strictly interpreted. According to the
appellant different stands taken by the authorities show that the
issue as to what is WLL(F) falls in a grey area and, therefore,
no ADC can be charged from the appellant. That, the said
1
question has not been decided. even by TRAI. That, the IUC
B
Regulation 2003 are statutory in nature; they have been enacted
under Section 36 of the 1997 Act; that the regulations having
been tabled before both the Houses of Parliament cannot be
altered or modified by circulars/letters/administrative directions
issued by the Authorities under the 1997 Act including the TRAI. c
Contentions of Shri Gopal Subramanium, learned
senior counsel for BSNL
12. According to BSNL, the appellant's service under the
name "unlimited cordless" is a WLL(M) (wireless local loop D
,--';
mobile service) as admittedly the said service is capable of
being operated outside the subscriber's premises and within
the SDCA. That the said service is squarely covered by the
definition of WLL(M) as defined under clause 2(xxviii) of the
IUC Regulation 2003. According to BSNL, appellant has
E
attempted to evade its liability of paying ADC to BSNL despite
providing WLL(M) services in the garb of WLL(F). With regard
to payment of IUC charges including ADC by WLL service which
contains a feature of "mobility", the TRAI issued clarification
dated 4.3.2005 based on exclusive definition of WLL(M) in its
IUC Regulation 2003. According to BSNL, any WLL service
F
!'
which gives the facility of mobility beyond the premises of the
subscriber and within SDCA has to be treated as WLL(M) in
respect of liability to pay the ADC in accordance with the
provisions of the IUC Regulation 2003. According to BSNL,
subsequent to the Consultation Paper dated 17 .3.2005, the G
TRAI reiterated vide communications dated 24.3.2005 and
,•
~
31.5.2005 addressed to the appellant herein that the WLL
service operating beyond the premises of a subscriber and
within the SDCA is to be treated as WLL(M) for all purposes
including payment of I UC/ADC and numbering plan etc.
H
218
SUPREME COURT REPORTS
[2008] 7 S.C.R.
.....
A
13. On the technology side, it is the case of BSNL that
payment of IUC/ADC has nothing to do with the nature of the
instrument and it is the nature of service which is relevant for
that purpose. That "unlimited cordless" is the service which is
provided through a handheld terminal.
8
14. On the point of reliance placed by the appellant upon
~
para 2.26 of the Consultation Paper it is submitted by BSNL
that the Consultation Paper was only a suggestive approach.
That, in any case, the question falling in consultation process
was whether ADC is payable to the fixed wireless terminals.
c What is WLL(F) and what is WLL(M) was not the question
pending in the consultation process. According to BSNL, in any
case the question whether ADC is payable to the fixed wireless
terminals was part of the explanatory memorandum to the IUC
Regulation dated 6.1.2005 itself and, therefore, it is the case of
D BSNL that Para 2.26 of the Consultation Paper relied upon by
the appellant was merely a suggestive approach for the future
payment of ADC on WLL phones.
15. According to BSNL, there is no merit in the contention
E
of the appellant that its impugned service is restricted to one
BTS/RF centre as the same is not technologically possible. In
this connection, it is submitted on behalf of BSNL that BTS has
only a receiver and a transmitter. It has no Intelligent Network
("IN"). The function of the BTS is different from the functionality
of Mobile Switching Centre ("MSC"). The utility of the BTS is
F that it receives the signals and forwards the same to the MSC.
The MSC is the intelligent part of the network. BTS is not the
intelligent part of the network. Registration of the numbers to be
served by the service provider is an eiement of the intelligent
network. Identification of the caller. is done by the intelligent
G network. Therefore, according to BSNL, it would be incorrect to
say that a BTS has some sort of mechanism to identify the caller .
• .
and to further forward the call to the MSC. Therefore, MSC is
the IN and BTS is only the transceiver (i e receiver and
transmitter). That, the role of a base station v1s-a-vis that of a
H MSC is, therefore, distinct and separate According to BSNL,
RELIANCE INFOCOMM LTD. v. BHARAT SANCHAR
219
,
NIGAM LTD. & ORS. [KAPADIA, J.]
there is no plea even in the petition that appellant can restrict A
the mobility of its service to one RF of a base station and that
the services of the appellant is operable only in 1/3 of one base
station zone. According to BSNL, the mobility of the service
impugned cannot be restricted to the premises of the subscriber
'
and, therefore, it has to be treated as WLL(M). This is borne
B
~
out, according to BSNL, from the opinion of the manufacturers
of the equipment of the appellant which clearly imports an
admission of the appellant that to restrict the impugned service
to the premises of the subscriber would be impractical and if it
is so restricted it would adversely impact its quality. That, in any c
event, the impugned service is actually found to be operable
throughout the SDCA and, therefore, it is a WLL(M). Therefore,
according to BSNL, appellant was liable to pay ADC as per the
rates prescribed by TRAI in its regulations.
16. According to BSNL, the directive/communication dated
D
A;
4.3.2005 issued by the TRAI only reemphasises the position
mentioned in the IUC Regulation dated 29.10.2003, namely, that
a fixed wireless terminal, if not confined to the premises of the
customer, will invite mobility within SDCA which in turn would
attract ADC charges on such services. Further, according to
E
BSNL, under the terms and conditions of licence issued by DoT,
the appellant had agreed to comply with the relevant International
Telecom Union ("ITU") standards as also the TEC's
specifications. That, even according to the generic requirements
"
issued by TEC, the remote station of the subscriber had to be
F
"fixed indoor wall mounted". That even as per the
recommendations of the ITU, the FWA has to be a Wireless
Access Application in which the location of end-user termination
and the network access point to be connected to the end-user
are fixed. According to BSNL, this technical information is well G
known and the appellant is fully aware of the concept of FWA.
... ,le
According to the appellant, the IUC Regulation 2003 provides
for payment of IUC including ADC for telecommunications
services. The definition of WLL(M) is provided for in clause
2(xxviii) which refers to limited mobility services using wireless
H
220
SUPREME COURT REPORTS·.
[2008] 7 S.C.R.
A in local loop technology within SDCA. That, Schedule Ill of IUC
Regulation 2003 refers to ser1ice and not to instrument and
makes ADC applicable for different types of calls and, therefore,
the payability of ADC as per the regulations is directly related
to the nature of the service and not to any kind of instrument.
B
17.According to BSNL, there is no merit in the submission
of the appellant that DoT has reclassified the impugned service
as WLL{M) as, according to BSNL, it has been made clear by
the DoT on numerous occasions that if the impugned services
cannot be restricted to the premises of the subscriber, it will be
C treated as WLL{M) for levy of ADC. That, what is clarified by
TRAI and DoT is that those WLL services which operate beyond
. the premises of the subscriber and within the SDCA shall be
treated as WLL{M) for all purposes including numbering plan,
payment of IUC, payment of ADC etc.