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2008 (4) TMI 723

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..... Act stood enacted. The Government introduced New Telecommunication Policy ("NTP") in 1999 and proceeded to implement the said policy. By TRAI (Amendment) Act, 2000 a key change came to be effected as a result of NTP, 1999. The said amendment segregated the Regulatory and Dispute Settlement norms of the original TRAI. Under the new regime, all disputes involving consumer and service provider(s) had to go to TDSAT. The said regime excluded civil courts from ruling on disputes arising out of TRAI decisions. TDSAT was conferred with original and appellate jurisdictions. The TRAI (Amendment) Act, 2000 defines precisely the regulatory powers of the TRAI. The said Regulator became responsible for introduction of new service providers, technical improvements, quality standards and fixing the terms and conditions of licences. One more event needs to be mentioned. In order to separate policy making and service provision roles of the DoT, the Government created Department of Telecom Services ("DTS"), which was later turned into the corporate entity known as BSNL on 1.10.2000. 4. Under the NTP, 1999, all new cellular mobile service providers had to pay a fixed fees upon entry, and then pay a .....

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..... g out of the range of the said cell system, the cell system can enable him to be transferred to a neighbouring company's cell system without the subscriber being aware of it. This is called roaming service. A cellular telephone is not to be confused with a cordless telephone, which is simply a phone with a very short wireless connection to a local phone outlet. High mobility of the users is one of the important properties of cellular telephone. The location of a user can change significantly during a call which can originate from the user or from the network. In cellular telephony a mobile user communicates with a base station. The base stations are connected to MSC, which is connected to the public telephone system. The most important aspect of cellular telephony is the unlimited mobility. The user can be anywhere within the coverage area of the network (i.e., it is not limited to a specific cell). The user can move from one cell to another even during one call. Cellular telephony is different from cordless telephone. In cordless telephone, there is a wireless link between a handset and a base station which in turn is directly connected to the public telephone system. It is .....

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..... is battery-powered wireless device or system which operates outside the office, home or vehicle. Its operation is autonomous. The examples of portable wireless are handheld cell phones and PCS units. All the above examples are common examples of wireless equipments in use today. iii) Wireless Mobile Communication: There are a variety of wireless communication systems for transmitting voice, video and data in local or wide areas. Mobile wireless technologies provide voice and data communication services to mobile users to use cell phones, internet terminals and related computing devices. iv) Wireless Communications Service (WCS): WCS is radio communications that may provide fixed, mobile, radio location or satellite communication services to individuals and businesses within their assigned spectrum block and geographical areas. WCS is today capable of providing more advanced Wireless Phone Services that would be able to pinpoint a subscriber in a given locality. WCS is today used to provide a wide variety of mobile services, including an entire family of new communication devices utilizing small, light weight; multifunctional Portable Phones and advanced devices with two-way da .....

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..... ll, the base station in that cell takes over the call. The frequency of the call is changed to a frequency used in the new cell during the transition. This is because adjoining cells cannot use the same frequencies. ix) Wireless Local Loop (WLL): Today, technologies provide WLL services, i.e., wireless access for home and business users to carriers and service provider network. According to Encyclopedia of Networking & Telecommunications by Tom Sheldon, wireless local loop ("WLL") refers to a variety of technologies for connecting subscribers to the public-switched telephone network ("PSTN") using wireless links, rather than copper wire. WLL is a practical solution for connecting subscribers in countries/areas that do not have the wired infrastructure. It is also practical in rural areas as an alternative to laying cable. WLL is primarily a fixed wireless service (the subscriber generally stays in one place), while cellular systems offer mobile communication and roaming among different systems. x) Basics of Wireless Communications: Today's wireless communications would not be possible without radio signals which are generated and emitted from a sender. They propagate throu .....

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..... ch there is core network consisting of BSC, numbering plan, softwares etc. which are essential to identify the source from which the call originates, the movement of the subscriber from one cell to the other and the identification of the call for billing purposes. The Intelligent Network is in MSC. Generally, radio signals are emitted from an antenna omni- directionally and they can pass several hundreds of kilometers without being affected by obstacles (what is known as seamless), which makes radio signals very attractive for radio and television broadcast. In wireless communications, different types of antennas are used which differ from each other in respect of directivity of signals propagation. When signals travel away from a transmitting antenna in a BTS, they are exposed to a reduction in their strength. The degree of attenuation depends upon the distance between the transmitting antenna and the receiving antenna, the wavelength of the signals and the surrounding environment (e.g., indoor, outdoor, rural, urban etc.). In wireless communications, the air interface (medium) must be shared between different applications (e.g., radio, T.V., mobile, cellular systems etc.) and .....

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..... ds on the signal strength of the base station and the degree of attenuation. Each BTS is assigned a certain number of channels for transmitting and receiving data which is called as cell allocation ("CA"). To avoid interference between cells, it needs to be guaranteed that the neighbouring base stations are also assigned cell allocations of different channels. There are no sharp borders between neighbouring cells. Most of the time they overlap. In urban areas, a mobile device can hear a set of around 10 base stations simultaneously, and then it selects from this set of base station within the strongest signal. The number of cells a network is made up of is basically a function of the size of area to be covered and the user penetration. When building up a new network, operators first concentrate on establishing a coverage in congested urban areas before establishing base stations in rural areas. If a network runs the risk of becoming overloaded in a certain region, the operators can increase the capacity by increasing the base stations density. A cellular network not only consists of base stations but also comprises a network infrastructure for interconnecting base stations, mobili .....

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..... s ("FWA") also known as WLL(F) has coverage between Wireless Local Area Networks ("WLANs") and cellular communication systems. The main purpose of FWA is to provide network access to buildings through exterior antennas communicating with central radio base stations. In this way, users in a building are allowed to connect to the network with conventional in-building networks. FWA is a service in which wireless access is intended as a cheap cable replacement without additional features. FWA replaces copper lines to the homes of the users by wireless links, but without the specific benefit of mobility. The original intent was to give access to customers for basic phone services bypassing the copper lines. Fixed wireless access system is one type of service. FWA system can also be considered as a derivative of cordless phones or wireless local area networks. FWA system essentially replaces a dedicated cable connection between the user and the public landline system. The important difference to be noted is that FWA system is not the same as cordless phones. The main difference from cordless system is that in FWA system there is no mobility of the user devices. There is a difference b .....

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..... nd selection of one BTS is the responsibility of the BSC. Therefore, one can conclude that from time to time a controlling MS (user) has to send updates of its location to its HLR. At the same time, the VLR and the MSC contains all the information about mobile subscribers from other networks that are in the area of this MSC and are allowed to roam in the network of this MSC. The Authentication Centre verifies the identity of each MS requesting a connection. The above discussion indicates the functionality of MSC, BSC and BTS. The data base is in MSC. It further indicates the functionality of BTS. BTS is, essentially concerned with transmission. The entire data base and the function of identifying the user and the call is in MSC. The numbering plan is one of the important elements of the network with MSC. The switching system is with MSC. The network and switching system includes the above two databases. The main component of network and switching subsystem ("NSS") is MSC, which controls the traffic between different BSCs. One function of the MSC is mobility management. Other functions are paging and location update. All interactions between networks especially the landline public .....

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..... ireless Communications by Andreas F. Molisch 2. Wireless Intelligent Networking by Gerry Christensen, Paul G. Florack and Robert Duncan. 3. India The Emerging Giant by Arvind Panagariya 4. Location-Based Services Fundamentals and Operation by Axel Kupper 5. From WPANs to Personal Networks-Technologies and Applications by Ramjee Prasad and Luc Deneire 6. Mc Graw Hill Encyclopedia on Networking & Telecommunications by Tom Sheldon 7. Encyclopedia of Technology Terms by Whatis.com xv) Generic Requirements: (a) Generic Model of Wireless Local Loop System: Apart from references to the technical data hereinabove, Government of India (DoT) has issued G.R. No. G/WLL-01/01. MAY 96 regarding generic requirements relating to Digital WLL system. These generic requirements issued as far back as May, 1996 is in consonance with the technological concepts enumerated in the above reference books. It supports what is stated hereinabove. We, therefore, quote hereinbelow relevant paragraphs from the above G.Rs.: "1.0 INTRODUCITON 1.1 This Generic Requirement (GR) relates to digital Wireless Local Loop (WLL) system to provide two way communication for Department of Telecommunication (DoT) c .....

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..... be supplied alongwith the equipment. 2.20 Mobility functions : optionally the system may support limited mobility within designated area. The mobile handsets shall conform to relevant standards for mobile application. The equipment supplier shall indicate the coverage area for mobility for the equipment offered. 12.0 Network Management System (NMS) : The Network Management System (NMS) shall be capable of performing the following functions: i) Fault localization including BSC, BS, RS and links between them. ii) Network configuration i.e., addition, deletion and change of network elements etc. iii) Performance, data collection. iv) Security against unauthorised access v) Network statistics Data related to channel occupancy, rejected calls etc. with visual display of faulty elements of the network. 15.0 Antenna : The type of antenna and gain may be decided by the supplier for getting desired coverage and performance of the system. Detailed specifications (technical as well as mechanical) shall be furnished by equipment supplier. Fixtures for antenna mounting at BSs and RSs shall be included as part of antenna supply." (b) Principles of Wireless Access: Principles .....

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..... rms "fixed", "mobile" and "nomadic" wireless access. The purpose of this Recommendation is to specify terms and definitions for terrestrial wireless access. 2 Scope The Recommendation specifies definitions for terms primarily focused in the field of terrestrial wireless access systems. Wireless access applications may be provided within the definitions of the radio services FS, MS, FSS and MSS contained in the RR. The ITU has deprecated the use of the term "loop" (see References below: CCITT Blue Book, Vol. I, Fascicle I.3, 1988); for this reason, and more so because this term does not make any sense with radio technologies, the use of the terms that include loop are deprecated. These include wireless local loop, radio local loop, and wireless access local loop. It should be noted that in many cases systems may be able to support a mixture of users (i.e. fixed, mobile and nomadic) and possibly with restrictions on the type of mobility. It is not practical to define terms for each possible combination, but those above should suffice to refer to the primary characteristics of the system." In addition, the said recommendation also defines relevant terms. The said definition .....

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..... were holders of basic service licence(s) migrated to Unified Access Services in November, 2003. The said UAS licence is dated 20.7.2001 w.e.f. 21.11.2003. The said UAS licence covers "access service" which includes wireline and/or wireless service including full mobility, limited mobility and FWA. Basically, in these civil appeals we are concerned with three wireless services, namely, full mobility, limited mobility and FWA. What is FWA has also been explained earlier in this judgment. We quote hereinbelow clause 2.2(a) and clause 2.2(c)(i), which read as follows: "2.2 (a) The SERVICES cover collection, carriage, transmission and delivery of voice and/or non-voice MESSAGES over LICENSEE's network in the designated SERVICE AREA and includes provision of all types of access services. In addition to this, except those services listed in para 2.2 (b)(i) licensee cannot provide any service / services which require a separate licence. The access service includes but not limited to wireline and / or wireless service including full mobility, limited mobility as defined in clause 2.2 (c) (i) and fixed wireless access. However, the licensee shall be free to enter an agreement with oth .....

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..... ing any type of network equipment, including circuit and/or packet switches, that meet the relevant International Telecommunication Union (ITU)/Telecommunication Engineering Center (TEC) / International standardization bodies such as 3GPP/3GPP-2/ETSI/IETF/ANSI/EIA/TIA/IS". Meaning of Interconnection Usage Charges ("IUC")/ ADC: 10. On 29.10.2003, TRAI notified IUC. ADC is a part of IUC. ADC is a percentage of the revenue. The framework of IUC regime was established by TRAI through its Regulation dated 24.1.2003 which was subsequently reviewed on 29.10.2003 and 6.1.2005. IUC has to be determined based on minutes of usage for various network elements and the cost of these elements. 11. ADC, on the other hand, is based on the consideration of cost based rent, local call charges, low rental in rural areas, free calls etc. to make the basic telecom services affordable to the common man, to promote universal service and universal access as required by NTP, 1999. It is important to note that ADC does not arise out of any legal right. It arises out of TRAI's consideration of smoothening the transition process during competition, i.e., providing support during transition period when c .....

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..... ould have filed its complaint before TRAI and BSNL could not have unilaterally called upon the appellants to pay ADC after such re-classification. The questions raised on behalf of the appellants is: Who pays ADC? Who decides as to who pays? In this connection, it is further submitted that under section 11(b)(ii) of the 1997 Act, the terms and conditions for grant of Inter- connectivity is to be fixed by TRAI; it is mandatory function of TRAI to do so and, therefore, it is beyond the competence of BSNL to re-classify and fix the ADC liability on to the appellants. 14. Learned counsel urged that from 1997 to 2004, the said "Walky" had been in the market to the knowledge of BSNL; the market knew the distinction between the three services and that the said Instrument stood classified during above period as WLL(F). That, GOTIT had also treated it as WLL(F). That, the appellants had moved TDSAT, in the present case, to set aside the demand of BSNL only on ground that BSNL had no authority to re-classify the said instrument from Fixed to WLL(M) service. That, BSNL could have challenged the use of "Walky" without payment of ADC before the TRAI in which event the said Authority could have .....

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..... only by TRAI and not by BSNL/DoT and that too after following the procedure under section 11 of the 1997 Act. 18. Learned counsel next urged that neither in the Licence nor in the 2003 Regulations is there any Premises Specific Restriction ever imposed and, therefore, it was not open to BSNL to make the impugned demand as the said restriction was not there during the relevant period. In this connection it was urged that during the entire period between 1997 to November, 2004, even DoT understood "Walky" to be portable in the entire SDCA; that only in March, 2005 it gave directions to the contrary to the appellants incorporating the above "Premises Specific Restriction" and that too without any change in the licence or the IUC Regulations 2003; that till 4.3.2005 the said restriction was never mentioned; that without complying with section 11 of 1997 Act, TRAI could not have issued such a directive on 4.3.2005, particularly when it seeks to impose a liability to pay ADC with retrospective effect. Learned counsel submits that, in the circumstances, matter of classification/reclassification arises which needs to be decided by TRAI. 19. Mr. Gopal Subramanium, learned senior counsel o .....

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..... T by its impugned judgment in favour of BSNL. By the impugned judgment, it has been held by TDSAT that Walky Calls attract ADC under the Regulatory Regime. 22. It was next urged that on facts there was no unilateralism as the Demand was made by BSNL only after the TRAI and the DoT had issued the above Circular and Directive respectively which have not been challenged. It is pointed out that in fact appellants have complied with DoT's order. Learned counsel would submit that if there was compliance of the Order/Directive of DoT dated 26.8.2005 there is no reason why appellants should not pay ADC for the period in question, viz, 14.11.2004 to 26.8.2005. According to learned counsel, compliance of DoT's Order dated 26.8.2005 itself indicates that even according to the appellants, ADC was payable in respect of the service, i.e., WLL(M) and, therefore, there is no merit in the argument advanced on behalf of the appellants that ADC could not be charged without change in the conditions of licence or 2003 Regulations. 23. It was next contended that under 2003 Regulations, reference is made to Fixed Wireless Access, Mobile Wireless Access and Nomadic Wireless Access. Before TDSAT, .....

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..... ("USO"). 29. At the outset, it may be stated, that, Regulatory Restriction should not be confused with technology limitation. With the technological advancement, "extent of mobility" has gone way beyond the "Premises Specific Restriction" but in this case we are not concerned with technology but with the levy of ADC. According to some authors, ADC is a tax. In the Revenue Regime, the Authority imposing the levy is not always bound by the concepts in technology. It is open to the Authority under the Revenue Regime to impose by way of Regulatory Restriction a parameter like Premises Specific Restriction to explain the concept of Limited Mobility. 30. WLL is a technology. In this case we are only concerned with Wireless Local Loop Mobile Service. As a technological concept, wireless in local loop technology simply means that the subscriber is connected to the nearest exchange of the appellants (MSC) through BTS (which is only concerned with transmission) through a radio link instead of through the copper wires. In general, it is cheaper than copper wire connectivity. In traditional wire-line network, the cost of the Last Mile amounts to substantial portion of the total cost of putti .....

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..... dure laid down under Section 11 of the 1997 Act. The effect of such directive, according to the appellants, is not only to reclassify the services but it also seeks to amend the terms and conditions of UAS Licence. It may be stated that directive dated 4.3.2005 stood clarified by DoT vide two clarifications dated 23.3.2005 and 26.8.2005. According to the appellants, the said clarifications were issued in the context of advertisement given by the appellants, which were later on withdrawn and that the said directive had no connection with ADC chargeability. According to the appellants, DoT is a licensor. According to the appellants, DoT had no authority to categorize Walky as WLL(M). According to the appellants, during the period 1997 to 2004, DoT and TRAI have treated Walky as WLL(F). According to the appellants, by reclassifying Walky as WLL(M), DoT had sought to unilaterally reclassify Walky as WLL(M) which amounts to change in licence conditions. According to the appellants, reclassification could have been done only by TRAI under Section 11 of 1997 Act and not by DoT. Therefore, as can be seen from the above arguments, it is clear that the basic complaint of the appellants is ba .....

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..... the subscriber where the telephone connection is registered. It should also be noted that it is licensee's responsibility to ensure that the subscriber terminal is operated in accordance with the terms of the Licence for fixed lines including this clarification. This is to further reiterate that separate level within allocated SDCA based Link Numbering is to be used for Wireline & Fixed Wireless Services. Wherever such restriction cannot be imposed, it shall be treated as WLL (M) feature for all purposes which inter-alia includes Numbering plan, Interconnection Usage Charges, Interconnection arrangements etc. (Subhash Chander) ADB(BS-II) 011-23036536 Copy to: The Secretary TRAI, Safdarjung Enclave New Delhi Sr. DDG (VAS), DOT" "Government of India Ministry of Communications & I.T. Department of Telecommunications Licensing Cell (Basic Services Group) 713, Sanchar Bhawan, 20, Ashoka Road, New Delhi 1 No.16-10/2004-BSII/TTSL 26th August 2005 To M/s. Tata Teleservices Ltd. 10th Floor, Tower-I, Jeevan Bharti, Connaught Place, New Delhi-110001. Sub: Alleged Violation of licence conditions. Whereas M/s.Tata Teleservices Ltd. (M/s TTSL) has been gran .....

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..... nes is same and is different from that of limited mobile services. The FWTs covered by one or sometime more than one Base Trans-receive Stations (BTSs). M/s TTSL further submitted that "Walky" is a brand established by Tata Teleservices essentially to promote and market their desktop Fixed Wireless Phones. These Fixed Wireless Phones combined the advantages of both mobile phones and landline phones. Further, clarification regarding Fixed Wireless Terminals was issued vide this office letter No. 10-10/03-BS-II/Vol.VI dated 23.03.2005 vide which it was clarified that the Terminal used for Fixed Wireless Services should be strictly confined to the premises of the subscriber where the telephone connection is registered. Separate levels within allocated SDCA based link numbering scheme are to be used for Wireline and Fixed Wireless Services. Wherever such restriction cannot be imposed, it shall be treated as WLL (M) feature for all purposes. It is needless to mention that the word "Fixed" is clearly understood and it does not require a separate definition in legal or common parlance. M/s TTSL submitted compliance to letter dated 23.03.2005 vide its replies dated 31.03.2005 stating t .....

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..... the demand of ADC on the appellants for the period 14.11.2004 to 26.8.2005. According to the appellants, such a directive dated 4.3.2005 cannot operate retrospectively. This is the key issue which we need to decide. In this connection, it may be noted that the said directive was issued to all access providers. The said directive came to be issued as it was brought to the notice of TRAI that new terminals were being deployed by access providers which terminals do not have any fixed network access point physically located at the address of the subscriber. In the said circular dated 4.3.2005, TRAI noted that fixed wireless services were required to be provided through fixed wireless terminals with the location of the network access point being fixed and with the end-user terminal being connected to it. That, it had been brought to the notice of TRAI that new terminals were being deployed by certain access providers which did not possess fixed network access point physically located in the premises of the subscriber (PSR). Therefore, by the said circular, TRAI directed the service providers to strictly ensure that the terminal used for fixed wireless services should strictly comply wi .....

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..... hybrid between FWA and MWA. Wireless access may be considered from many perspectives. In this case, we are concerned with mobility capabilities of the terminal: fixed, nomadic, mobile, restricted mobility etc. As stated hereinabove, the main purpose of FWA [WLL(F))] is to provide network access to buildings through exterior antennas communicating with Central Radio Base Stations. In FWA, users in a building are allowed to connect to the network with conventional in-built networks. FWA is a service. It is intended as a cheap cable replacement, without additional features. Wireless systems differ depending upon the amount of mobility that they allow for the users. FWA system is a derivative of cordless phones. In FWA there is no mobility of the user devices. This is where the concept/principle of PSR emerges. As stated above, there is a difference between mobility and portability. A terminal may be portable but every portable device is not mobile. Therefore, in our view, the concepts mentioned in circular dated 4.3.2005 issued by TRAI exist in telecommunications right from 2001. The said circular merely clarifies and brings out the concept premises specific restriction. 41. To sum u .....

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..... roviding WLL(M) service in the garb of fixed wireless phone service (FWA) which disturbs the integrity of the numbering plan. It is important to note that in the case of full mobility, the rate is different as compared to the rate in the case of limited mobility as compared to the rate in fixed wireless service. This difference in the rates is spelt out in IUC Regulation, 2003. It is for this reason that even in the clarification issued by DoT on 23.3.2005 that DoT had warned the access providers by pointing out that the issue of mobility has implication with respect to the applicability of ADC. It was further clarified that if it is not possible for the access provider to comply with the requirement of PSR then the Walky services shall be treated as WLL(M) service for all purposes including numbering plan, interconnection usage charges, ADC etc. This is because a separate level with allocated short distance charging area based link numbering is to be used for wireline and fixed wireless services. ADC is a levy. It is based on what is called as recognition of services. Mobility is an important service feature. The record indicates that right from 2003 when UAS licence stood issued .....

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..... fall in WLL(F) for the purposes of levy of ADC. However, since the user device in the case in hand is mobile throughout SDCA, the services which the instrument Walky offers has to be categorized as WLL(M) service. In the present case, we find merit in the contention advanced on behalf of BSNL that the appellants were providing WLL(M) services during the above period in the garb of FWA or fixed wireless phone services and thereby they have infringed the integrity of the numbering plan. Therefore, ADC is payable by the appellants for the aforesaid period, namely, 14.11.2004 to 26.8.2005. 46. Lastly, as stated above, classification of services stood effected under UAS Licence 2003. Under the terms and conditions of that licence, the access providers were required to maintain the integrity of the numbering plan. This was one of the conditions of the licence. Similarly, classification/categorization of wireless services was done under the licence. The categorization constituted the term of the licence. As a matter of follow- up for the purposes of levy of certain charges, including ADC, IUC Regulation 2003 stood enacted. Under Section 11(1)(b) of the 1997 Act, the TRAI is empowered to .....

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..... m Ltd. in the conjoint appeal which we will separately deal with in the subsequent judgment that BSNL have also not disclosed their numbering levels for their fixed wireless service and for their LL(M) services which they have been providing during the relevant period in the name of "Tarang", which according to the appellants, would now constitutes WLL(M) service. According to the appellants, BSNL has also been providing fixed wireless phone services which has limited mobility. This is a matter of quantification. That stage has not yet arrived. However, Mr. Gopal Subramanium, learned senior counsel appearing on behalf of BSNL, has fairly stated that BSNL would abide by the parameters laid down in our judgment and whatever adjustments required to be made in that regard in the context of claims and counter claims, the same shall be worked out in near future. Be that as it may, we express no opinion on the point of quantification which question did not arise even before TDSAT in this case. Suffice it to state that the services of the appellants vide the instrument Walky falls in the category of WLL(M) service and, accordingly, the appellants would be liable to pay ADC in that regard d .....

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