With the emergence of technology and convergence of communications, media and technology, the Ministry of Communications had initiated a consultative process with the relevant stakeholders to seek inputs on how to facilitate ease of doing business and make digital services in India a reality. Upon deliberated consultations and considering global best practices, the Draft Indian Telecommunication Bill, 2022 (the “Bill”) has been prepared.
The draft Bill prepared offers better clarity and explanation to terminologies and provisions that are akin to the advancements in technologies and clarify certain ambiguities that were cause of legal disputes in the past few years. With the evolution of technology and with the advent of 5G services in India, the new bill has the potential to augment the initiatives of the government for ease of doing business.
A similarly titled bill – European Electronic Communications Code (“EECC”) – was established by Directive (EU) 2018/1972, amongst others to promote connectivity through and access to high-capacity networks including 5G networks, effective competition and the security of networks and services in the EU and in the UK. The EECC takes into account today’s reality of the provision of digital services through convergence of telecommunications, media and information technology. These directives are now being considered by the member nations and are being converted into laws.
Coming back to India, the draft Indian Telecommunication Bill, 2022 focusses on four pillars namely efficient utilization of spectrum, bringing in efficiency in policy making, supporting innovation and bringing in security for the end user.
On the licensing front, the draft Indian Telecommunication Bill, 2022 bill has widened the scope of licensing by including OTT services under the scope of the definition of telecommunication services. The Bill in its current construct has defined telecommunication services elaborately. While the intent of the government has been clear on introducing light touch regulation on such services, it will be important to recognize the difference in services offered by different ecosystem players. Accordingly, as a recommendation, Department of Telecom (DoT) may consider segregating communication service providers and content service providers.
By widening the options available to allow the utilization of spectrum through multiple options like auction, assignment and administrative allotments, the bill views the spectrum allotment and auction in a new light to ensure that the natural resource is efficiently used. Further, there is a focus on re-farming, leasing, or re-harmonizing of spectrum for efficiency purposes. While the bill provides for assignment of spectrum primarily through auction, it does provide for administrative process of allocation for certain prescribed usages and also leaves the option for ‘allocation in any other manner, as prescribed’. To ensure regulation augments growth and does not stifle innovation, it will be important for the government and industry to work together to identify innovative methods for spectrum allocation through this provision. Also as the contours of the licensing regime will be finalized through separate rules, it is important that the licensing conditions that will be mandated though subordinate legislation should follow extensive consultations to ensure that the stakeholders can provide holistic comments on the framework.
On the policy front, by relaxing the licensing requirements for telecommunication infrastructure and replacing it with only registration requirements, the government has simplified the digital infrastructure creation process. Similarly, to ensure widespread availability of wireless equipment, the bill replaces licensing requirements with an authorization process.
The other important aspect of the proposed bill is service continuity of operations – in the past, where telcos suffered litigations and operational ‘freeze’ over their spectrum assets, service continuity suffered as they were unable to sell spectrum back to the government. The draft bill provides that a licensee handling insolvency proceedings can now continue to operate provided it meets the prescribed conditions of the bill.
To drive innovation, the Bill proposes to replace the Universal Service Obligation Fund (USOF) with the Telecommunication Development Fund (“TDF”). This move aims to boost connectivity in underserved urban areas, R&D, skill development by supporting pilot projects and enhancing the new technologies. This will allow the nation to be at a level playing field in the existing technology development process and perhaps excel in some of the future technologies like 6G.
The bill also proposes a regulatory sandbox that enacts innovation. The related provisions of the bill, allow companies, startups to use the sandbox to develop and test new technology and facilitate innovation under a suitably flexible framework. Such a framework will provide special terms and conditions and exemptions from terms and conditions of any license, assignment, registration or authorization. Startups, SMEs and MSMEs along with telcos and other stakeholders are provided a government backing to ‘fail fast and learn fast’ under this sandbox. This not only empowers startups but also generates employment, reduces the time-to-market for new and complex technologies and helps secure funding for a long-term commitment.
To address some of the security issues and putting national security at the forefront, the bill empowers the regulator to prescribe standards on equipment, network and services.
The Bill has also put the onus on the license holder to identify the person to whom telecom services are provided to and at the same time needs the users to furnish true particulars to curb impersonating while availing telecommunication services. Such frameworks are expected to go a long way in garnering citizen trust, which will further propel digital adoption in the country. On this front, the government should consider initiatives introduced by TRAI on unsolicited messaging by introducing elaborate operating guidelines being implemented through a blockchain infrastructure by the TSPs and ecosystem partners.
Also with regard to the power to mandatorily seek information, section 51 of the proposed bill should be accompanied by clearly laid down guidelines to clarify the circumstances and manner in which such information can be requested. The scope of ‘information’ should also be clarified to ensure that business proprietary information is not mandatorily sought. To maintain confidentiality of such information, the Bill must also prescribe secure channels for sharing of such information.
While the draft bill demonstrates the intent of the government to enable the sector with light touch regulatory policy which prioritizes security of an end user and gives a legal backing to every clause for betterment and upliftment of the masses through higher QoS levels, it would be critical for the government to demonstrate the continuity of this intent in the enabling policies, rules and notifications too. It will be equally important for the government to maintain the light touch regulatory approach in spirit and in action so as it frames the operational mechanism of this framework so as to bolster investor confidence and not let regulation hinder growth and innovation.