Absolute 100% service benchmarks are impracticable; penalties must be proportional and account for force majeure.

The Appellant, an Internet Service Provider (ISP), challenged an order dated June 20, 2023, issued by the Respondent (TRAI), which reiterated an earlier order dated January 19, 2022

The order imposed a Financial Disincentive (FD) of ₹1,00,000 for the quarter ending December 2020 due to an alleged violation of the "Quality of Service (QoS) of Broadband Service Regulations, 2006"

Specifically, the Appellant achieved a 99.70% success rate in "service provisioning/activation time" against a benchmark of 100%

The Appellant contended that the 0.3% shortfall (affecting approximately 80 out of 30,000 subscribers) was due to the COVID-19 pandemic, lockdown restrictions, and technical teams being barred from containment zones

TRAI had exempted other quarters (June 2020, September 2020, and June 2021) from FDs but refused to exempt the December 2020 quarter because the Appellant failed to provide a "bifurcated" performance report for COVID and non-COVID periods

The Tribunal applied the Telecom Regulatory Authority of India Act, 1997, specifically Section 14A(2) regarding appellate jurisdiction

The primary regulations involved were the "Quality of Service of Broadband Service Regulations, 2006" and its 2012 Amendment

Regulation 3 sets the 100% benchmark for service provisioning "subject to technical feasibility"

Regulation 3A (introduced in 2012) mandates FDs "not exceeding" ₹50,000 for the first contravention and ₹1,00,000 for subsequent contraventions

The court also considered the principle of force majeure and the doctrine of proportionality in administrative law, emphasizing that discretionary penalties must reflect the gravity of the breach

The Tribunal reasoned that a 100% benchmark is inherently impracticable, noting that even critical infrastructure like power grids or emergency services typically operate on SLAs between 99.5% and 99.9%

During the pandemic, the inability of technical teams to enter containment zones or quarantined homes constituted "technical non-feasibility," a factor TRAI failed to consider despite the 2006 Regulations allowing for such exclusions

The Tribunal found TRAI’s demand for a "bifurcation" of COVID and non-COVID periods arbitrary, as the entire period from March 2020 to December 2022 was uniformly impacted by the pandemic

Furthermore, the Tribunal critiqued TRAI’s "mechanical" application of the maximum penalty. Since Regulation 3A uses the phrase "not exceeding ₹1,00,000," TRAI was required to exercise discretion based on the degree of compliance

Imposing the maximum fine for a 99.7% achievement—the same penalty that might apply to a 1% achievement—was deemed a failure to exercise reasoned discretion

It held that the Respondent was not justified in treating the December 2020 quarter differently from other COVID-impacted quarters

The Tribunal formally recorded its appreciation for the Appellant’s technical teams for maintaining a 99.7% compliance rate during the pandemic

All financial disincentives imposed for the period were quashed