On September 21, 2022, the Department of Telecommunications (“DoT”) at the Ministry of Communications, Government of India (“Government”), came up with the Draft Indian Telecommunication Bill, 2022 (“Draft Bill”) with an initiative to restructure the legal and regulatory framework for the telecommunications sector. The Bill was accompanied by a nineteen-page explanatory note, which emphasised the need to improve digital inclusion, accelerate the growth of the telecommunications sector, and create a future ready, international telecommunications regime.
The Bill presently has been put up in the public domain for inviting comments after an elaborative public consultative process initiated in July, 2022. The last date for submitting comments on the draft Bill has been extended to 10th November, 2022.
The Bill will replace the existing legal framework governing telecommunication in India, comprising of the Indian Telegraph Act, 1885, the Wireless Telegraphy Act, 1933 and the Telegraph Wires (Unlawful Possession) Act, 1950.
The preamble of the Bill recognises that telecommunication is a key driver of socio-economic development and specifies that telecommunication infrastructure and telecommunication networks are important parts of public infrastructure. Therefore, there is a dire need to ensure the availability of affordable, reliable, secure and universal telecommunication services.
In this article we will examine some of the features of the Draft Bill against the stipulated objectives and attempt to analyse the same holistically.
The key choice to be made by the drafters of the Bill was whether to assert a broad ability to license and regulate various telecommunications services presently termed as the “Exclusive Privilege (also the case in Singapore), or to inherently recognize that certain types of activity would simply not be regulated (as is the case in many of the other jurisdictions like EU, USA, and Australia).
The DoT opted by reserving an “exclusive privilege” to provide telecommunications services, establish and operate telecommunications networks and infrastructure, and use and assign spectrum as per Section 3 of the Draft Bill. The choice with the DoT with respect to retaining the exclusive privilege was also crucial as it would directly imply competition in the market.
We have witnessed how the Telecom market has shrunk from having a level playing field with 10 different Telecom Operators to shrinking into an oligopoly with three dominant service providers post the advent of 4G and Jio in the market. Even recently, 5G Spectrum was allocated to only four companies, the newest entrant being Adani-Data Networks.
It can be food for thought whether opting for a lesser regulated regime and letting go of the ‘Exclusive Privilege’ would have created a scope for better competition in Indian Telecommunication Market, since the existing regulation has more or less failed to regulate competition effectively.
The Draft Bill in its definition clause under Section 2, has gone onto define some key terms in the broadest possible manner. Some of them being the definition of ‘Telecommunication’, ‘Telecommunication Network’ and ‘Telecommunication Services’.
The definition of the term Network is expanded to include software-based applications and platforms as well. Not to miss, it would also cover OTT and broadcast licensing as well, if correct interpretation is given to this definition.
These refer to services that provide real time person-to-person telecommunication services. Some popular examples of these include messaging platforms like WhatsApp, Telegram, Signal, Messenger, Duo, Google Meet etc.
These platforms use the network infrastructure of telecom service providers like Airtel, Vodafone and Jio and provide features that compete with telecommunication services such as voice calls and SMS services.
Telecom Service Providers (TSPs) since long have put allegations on these OTT Communications Platforms that the features available on these platforms including calling and messages, cut into their sources of revenue (voice calls, SMS) while not having to deal with infrastructure and licensing costs which the TSP’s have to undertake.
In view of the same, the TSPs have been demanding a level playing field with OTT services.
The current draft of the Bill expands the definition of “telecommunication services” to include OTT communication services. As a consequence of this, OTT telecommunication services may be subject to the same licensing conditions as TSPs. Under the extant framework, TSPs have to be issued the Unified Access Service Licence (UASL) for them to be able to provide telecom services in India. If OTT communication services are required to obtain the same license, they would also be subject to a number of conditions such as maintaining ‘know your customer’ details of their users, adhering to certain encryption regulations and allowing lawful access to the government of their equipment and networks.
Several provisions overlap with MeitY’s powers under the Information Technology Act. Example being the Intermediary Guidelines 2021, which already puts in place a heavy responsibility over the subject platforms. Although, the compliance to be assumed under the statutes can be said to be different, it will be an uphill task for these companies to manage the same and will certainly not help in ease of doing business for these companies.
While streamlining of multiple provisions proves helpful for the industry, relevant inter-departmental consultations should be concluded in order to remove overlap in laws, and achieve the Government’s objectives without internal constraints. This is particularly important as telecom operators are also subject to other frameworks in the pipeline by other agencies, such as the Digital India and Data Protection Bills.
As per section 4 of the Draft Bill, licensed entities are required to validate their identity and licensed operators are required to “unequivocally” identify persons to whom they provide services, through a verifiable mode that remains to be prescribed.
To curtail the ever-increasing incidence of spam calls and frauds, the draft Bill proposes that the identity of the person communicating using any form of telecommunication services shall be available to the user receiving such communication. This would mean that unlike now where only the phone number of the person making the communication is displayed, going forward the name of the person would also be displayed.
To implement the same with intent and efficiency, the draft Bill necessitates Licence holders to identify the users of its service through a verifiable mode of identification. To ensure that a user provides correct details, the draft Bill penalizes providing wrong identification details with a fine up to ₹50,000 being one of the penalties to even barring the person from using the telecom service for a certain duration.
The proposed Bill further stipulates that commercial communications that are promotional and advertising in nature shall only be made with the subscriber’s prior authorization. While the “Telecom Commercial Communications Customer Preference Regulations” were previously published by the Telecom Regulatory Authority of India (TRAI) in 2018, spam communications and the unrestricted exchange of contact information remain widespread. Its inclusion in the proposed Bill removes it from TRAI’s jurisdiction and provides the government the authority to impose severe penalties on violators.
Provisions on notification for M&A deals under section 19, and having statutory basis and guidelines for Right of Way while laying down infrastructure under chapter 4 of the Draft Bill are some of the measures being undertaken to augment ease of doing business.
Further, the Draft Bill proposes for removal of redundant penalties (e.g., trespass in the telegraph office). It further creates a scope of settlement of offences by payment of fines, and voluntary undertaking. This would lessen the threat of criminal prosecution for operational issues faced by telecom operators. This is done to modernise the regime and lessen the litigation burden on the TSP’s, another step being undertaken in direction of convenient and easy business.
The modernisation and regulation of Telecom Regime was in the pipeline for some time now and the intent of this legislation makes it clear that incorporating technology is the way forward. The intent of the government has been to promote business in the sector and invite more FDI but a lot of gaps have to be fulfilled to make it a comprehensive legislation.
This article was first published on IPRMENTLAW