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Communication panel to regulate market dominance & influence

Communication Commission, the super regulator being planned by government for the telecom and broadcasting sectors, will closely follow and regulate the market dynamics in terms of dominance and power to influence the market.

Under the proposed Communications Convergence Bill, originally drafted under the BJP-led NDA government in 2000, a super regulator with defined powers, procedures and functions for regulatory and licensing functions has been recommended, sources said.

Besides, regulating the market to check dominance by a single player or a group, the Commission will also regulate anti-competitive behaviour, they added.

The Department of Telecom (DoT) is likely to finalise the draft Bill before the Winter Session of Parliament.

However, the government through the Communications Convergence Bill also aims provide avenues to stimulate competition in services, applications and devices, where it feels that the scope for market competition is high and seeks to provide an "easy entry and easy exit" policy, sources said.

It also wants to promote transparency as well as only regulate networks where the scope of competition is limited, which would focus on price and quality of service, they added.

Sources said: "The regulations being planned are proportionate in nature against those with significant market power. That apart, the government wants to regulate market dominance and concentration of power to influence markets -- networks, services, applications and devices -- as well as anti-competitive behaviour." 

In the past also the government has tried to check market dominance through various policy initiatives.

Through its Mergers and Acquisition guidelines, issued in February this year, the government has also tried to check market dominance by telecom players in case of a merger.

The M&A guidelines state that the merged entity will be allowed to hold a maximum of 25 per cent spectrum allocated in a service area and 50 per cent in a particular band for telecom services under the rule.

In case of CDMA spectrum (800 Mhz band), government has fixed the upper limit of the total spectrum holding at 10 Mhz.

Also a merged entity will be allowed to hold a maximum of 2 blocks of 3G spectrum in a service area. This rule will check amalgamation of more than two 3G spectrum holding companies.

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