A self-governing regulatory authority was indispensable for the telecommunications services due to the entry of private sector in these services. The necessity was signified in the principles issued for the entrance of private sector in basic telecom services. In 1994, the Government of India framed the National Telecom Policy that magnetized Foreign Direct Investments as well as other domestic ventures. Hence Telecom Regulatory Authority of India (Ordinance), 1997 was promulgated to constitute The Telecom Regulatory Authority of India. Soon after, The Telecom Regulatory Authority of India Act, 1997 was enacted on March 28, 1997 which came with retrospective effect from January 25, 1997.

The Act provides for the establishment of Telecom Regulatory Authority of India by the Central Government through notification. The Authority shall have the status of a body corporate with continuous succession and common seal, with the power to purchase, hold and sell off property, right to enter into agreements and the right to litigate. The Authority shall comprise of a Chairperson who is at present or a retired Judge of Supreme Court or Chief Justice of High Court and at least two members but should not go beyond six members, who are appointed by the Central Government. The other members shall have special knowledge and understanding in telecommunication, commerce, economics, accountancy, legal affairs, management and consumer affairs.

The Chairperson is entrusted with the authority of general supervision, administration and direction in the activities of the Authority. He shall implement and discharge the powers and responsibilities of the Authority during presiding over the meetings and shall also perform such other functions as conferred under the Act. One of the members of the Authority is appointed by the Central Government as the Vice-Chairperson to perform the responsibilities and powers of the Chairperson assigned to him or delegated to him under the Act. Without considering the provisions of the Indian Telegraph Act, 1885, the 1997 Act hands over certain important functions on the Authority as provided under:

  • Advocate the requirement and timing for the opening of new service provider;
  • Provide terms and stipulations for granting license to the service provider;
  • Guarantee technical compatibility and effectual inter-connection among the service providers;
  • Control dealing amongst service providers of allocating the revenue acquired from the telecommunications services;
  • Guarantee observance of terms and conditions provided in the license;
  • Advocate revocation of license for non-observance of the stipulations of the license;
  • Prescribe the time period for granting local and service long distance circuits between the providers of telecommunications;
  • Assist competition and encourage efficiency in the activities of telecommunications to enhance development;
  • Safeguard the interests of consumers;
  • Supervise the service quality and conduct surveys of services etc.

As a dispute settlement mechanism, the Act provides for the constitution of bench comprising of the Chairperson and two other members to adjudicate upon disputes arising between the service providers and group of customers or among service providers. The bench shall be considered as a civil court in the matters provided under the Act and shall be guided by the principles of natural justice. The Act provides for the provision of appeal by an aggrieved person to the High Court from the order of the Authority. The Act establishes Telecom Regulatory Authority of India General Fund which shall be credited as provided under the Act.

The Act confers power on the Central Government to formulate rules for the effective implementation of the enactment. The Authority shall make regulation in exercise of the powers conferred under the Act. The Central Government has made changes to the 1997 Act by enacting the Telecom Regulatory Authority of India (Amendment) Act, 2000 which modified the structure of the Authority. The Telecom Disputes Settlement Appellate Tribunal has also been established by an Ordinance promulgated in the year 2000.