IUC Regulation 2008 which stated that ADC is not and cannot be part of IUC because IUC consists of only three components -- Origination Charge, Carriage Charge and Termination Charge. As pointed out by him, in Para 31 above, ADC is payable to BSNL even though there is no case of interconnection. According to the counsel, Paras 8, 9 and 10 of the Explanatory Memorandum to the IUC regulation 2008 clearly state that "Interconnection Usage Charges means the charge payable by one service provider to one or more service providers for usage of the network elements for origination, transit and termination of the calls. ..... Therefore the principle followed by the Authority was that every cost of all the elements of the network required for completion of a call has been accounted for in IUC and any deficit arising out of rentals and to make calls affordable was accounted for in ADC. Thus the purpose of ADC was different from IUC.... In this regard, it may also be noted that in per minute based ADC regime, in most of the scenarios the ADC was to be paid to BSNL, even when no IUC is required to be payable to BSNL as it is not involved in the completion of the call. ... similarly in the percentage of AGR-based ADC regime, all the NLDOs and ILDOs are paying ADC to BSNL, even if some of them are not carrying voice traffic and not having interconnection with BSNL. In view of all the above, the Authority found no merit in the argument that ADC is an integral part of IUC”. The learned counsel also stated that the Hon’ble Supreme Court in the Reliance Infocomm case, cited supra , had observed that ADC is essentially to compensate the difference between costs and local call revenue and that it is actually a subsidy.
