THE CONTEXT: Recently, the Ministry of Communication published the draft of the Indian Telecommunication Bill, 2022 to replace the current legislation governing the telecommunication regime in India, including the Indian Telegraph Act, of 1885. Although the Bill has many laudable objectives, there are also some critical concerns raised regarding the impact of the Bill on various stakeholders. This article analyses these issues in detail from the UPSC perspective.
THE SALIENT FEATURES OF THE BILL
CLARITY ON SPECTRUM ASSIGNMENT
- The Bill reaffirms the government’s authority to assign spectrum, with or without auction, and declares common good and access to telecom services as the objective for spectrum assignment.
EASING CRIMINAL PENALTIES
- It seeks to remove several redundant penalties. Example- trespass in telegraph office under Section 23, The Indian Telegraph Act, 1885.
- Further, introduces the settlement of offenses by payment of fines, and voluntary undertaking.
- This would augment the ease of doing business and considerably reduce the threat of criminal prosecution for operational issues faced by telecom operators.
LICENSING INTERNET-BASED APPS
- The Bill requires OTT communication services, which are essentially Internet-based apps/software, to obtain telecom licenses and thereby bring them under the telecom framework.
EXPANSION OF SHUTDOWN AND SURVEILLANCE POWERS
- The Bill allows the government to direct suspension of transmission of messages or provision of telecom networks or services.
COORDINATION
- It is based on Wireless Planning Coordination (WPC) reforms which are aimed at making the process more efficient and without physical interference for companies applying for permits. WPC is responsible for issuing amateur radio licenses, allotting the frequency spectrum, and monitoring the frequency spectrum.
- It is expected that time for licensing would reduce to 28 days ushering reforms in licensing through an online process.
REFUND/DEFAULT IN PAYMENT BY LICENSEES
- It has proposed a provision for refund of fees in case a telecom or internet provider surrenders his license.
- Further, it has provided a framework for governing payment defaults by licensees, registered entities, or assignees, and allows the government to write off such amounts or part thereof.
TELECOMMUNICATION DEVELOPMENT FUND (TDF)
- It proposes to replace the Universal Service Obligation Fund (USOF) with the TDF.
- USOF is the pool of funds generated by the 5% Universal Service Levy that is charged to all telecom fund operators on their Adjusted Gross Revenue.
RIGHT OF WAY (ROW)
- RoW is a pre-requisite for establishing telecommunication networks and improvement of telecommunication services.
- The Bill seeks to reduce approval permission for RoW down to 6-7 days promoting uniformity in telecommunication infrastructure.
TELECOM REGULATORY AUTHORITY OF INDIA (TRAI)
- TRAI’s position has been reduced in a number of ways:
Ø Reducing it to a recommendatory body from a regulatory body.
Ø Department of Telecommunications will no longer be required to refer back to TRAI the recommendations for reconsideration.
- The removal of such powers is not in line with an international practice where telecom regulators are endowed with a greater degree of independence to ensure that investor confidence and consumer protection are maintained in the market.
THE RATIONALE FOR THE DRAFT INDIAN TELECOMMUNICATION BILL, 2022
India’s Telecom sector stands second in the world in terms of market share. On the contrary, it is coupled with a number of challenges, of which Policy overlapping is a major one. The Telecom sector in India has become a victim of an Institutional Jungle. The duality of control by various machineries of the government has created unresolved dilemmas for the Telecom Sector in India. This led to the drafting of the Telecom Bill 2022, so as to replace the obsolete colonial laws and to bring coordination in the sector.
Regulatory Framework of Telecom Sector in India
Ministry of Communication
Department of Telecommunication
Wireless Planning Commission (WPC)
Telecom Regulatory Authority of India
Telecom Disputes Settlement and Appellate Tribunal
Laws and Regulations
The Indian Telegraph Act, 1885
The Indian Wireless Telegraphy Act, 1933
The Telecom Regulatory Authority of India Act, 1997
The Information Technology Act, 2000
The Broadband Policy 2004
National Digital Communications Policy, 2018
PROBLEMS IN THE TELECOM SECTOR IN INDIA
SUPPLY-SIDE ISSUES
- The telecom market is fragmented as it is divided into many players. According to TRAI, the market share of various Telecom companies as of June 2022 is- 36% of Jio whereas Airtel’s market share improved slightly to reach 31.63%.
- The telecom sector is accumulated in huge debt as it is likely to escalate to as much as Rs 6 lakh crore by this fiscal end following the spectrum purchase outgo, and network upgradation.
DEMAND SIDE ISSUES
- As per the white paper on broadband at the last International Telecommunication Union (ITU), states that broadband penetration in India is only 7% which is a matter of concern.
- The inadequate availability of spectrum is a major concern for India. Further, the situation is worsened as ISRO and India’s defense forces are demanding a major reservation in Spectrum allocation.
REGULATORY ISSUES-
- Since 2005, the DoT and telecom companies have had a dispute over the definition of AGR.
- The telecom companies argued that the AGR should include only the income from the telecom operations which was supported by TDSAT whereas, in 2019, the Supreme Court ruled in favor of the DoT by accepting its definition so as to include non-telecom incomes like the asset sales, interests on deposits, rents, etc. in AGR.
- Thereby, ordering them to pay Rs.92,000 crores to the government within three months.
AVERAGE REVENUE PER USER (ARPU)
- The decline in ARPU is sharp and steady, which, combined with falling profits and in some cases, serious losses, is prompting the Indian telecom industry to look at consolidation as the only way to boost revenues.
LACK OF TELECOM INFRASTRUCTURE IN SEMI-RURAL AND RURAL AREAS
- Service providers have to incur huge initial fixed costs to enter semi-rural and rural areas. Key reasons behind these costs are the lack of basic infrastructures like power and roads, resulting in delays in rolling out the infrastructure.
CURRENT DEVELOPMENT- 5G SPECTRUM ALLOCATION A SETBACK FOR TELCOS
Cellular Operators Association of India (COAI) has made its position clear by allowing independent entities to set up private captive networks with direct 5G spectrum allotment would ‘severely’ impact revenues and degrade 5G’s business case for telecom operators.
REVOLUTIONARY PROVISIONS OF THE DRAFT INDIAN TELECOMMUNICATION BILL, 2022
- Consumer Protection Measures: The identity of the person communicating using any form of telecommunication services shall be available to the user receiving such communication, thereby curtailing spam calls and frauds.
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. This facility will be available for voice calls but also for users of OTT communication services.
- Commercial communications which are advertising and promotional in nature should be made only with the prior consent of a subscriber.
- Covering OTT services: One of the key changes is the inclusion of new-age over-the-top communication services like WhatsApp, Signal, and Telegram in the definition of telecommunication services, which has been a long-standing demand of the Telecom Companies.
CONCERNS OVER THE DRAFT INDIAN TELECOMMUNICATION BILL, 2022
It is argued that, if the bill is passed in its current state, it would not only fail to achieve its objectives but also prove an impediment to human liberties and the goal of digitization claimed by the world’s largest democracy.
- INTERNET SHUTDOWNS
- The bill empowers the Union and state government under Clause 24(2), to suspend internet services in cases of “occurrence of any public emergency or in the interest of the public safety or in cases of national security”.
- This has raised concerns that the proposed provision gives the government power to order internet shutdowns explicitly.
- Currently, internet shutdowns are done under the Telecom Services (Public Emergency or Public Safety) Rules, 2017.
Statistics-Studies-Judgment on Internet Shutdown:
➢ The Software Freedom Law Centre (SFLC), a legal services organization that tracks global internet shutdowns, has found that there have been 683 internet shutdowns in India since 2012, 66 of which were in 2022.
➢ The Parliamentary Standing Committee on Communications and Information Technology, in its 26th report, titled ‘Suspension of Telecom Services/Internet and its Impact’, noted the human rights impact of the misuse of internet shutdowns in India, and how the grounds of “public emergency” and “public safety” are used as a tool of policing and for administrative purposes.
➢ In Anuradha Bhasin versus Union of India (2020), the Supreme Court also expressed displeasure regarding the frequent shutdowns of the internet, and opined that they should only be enacted if absolutely necessary and only after carrying out certain balancing tests as a restrictive step.
2. SURVEILLANCE
- The bill not only mirrors but also expands the scope of Section 5(2) of the Indian Telegraph Act by expanding the scope to “telecommunication services or telecommunication network” to take OTT under its ambit.
Section 5(2) of the Indian Telegraph Act, of 1885 states that the Union or state government or any officer authorized on their behalf to intercept messages through telegraph as a part of the surveillance framework of the country.
- It may cause OTT platforms practicing end-to-end encryption to disclose information to surveillance officers authorized by the government.
- The Justice B.N. Srikrishna-led Committee of Experts on a Data Protection Framework for India also noted the plague of surveillance without any protections from legislation and judiciary, which needed to be addressed.
3. IMPACT ON TRAI(TELECOM REGULATORY AUTHORITY OF INDIA)
The Bill considerably dilutes TRAI’s position in a number of ways, reducing it from a regulatory to a recommendatory body.
- First, the government would no longer be required to seek recommendations from the TRAI before issuing licenses.
- Second, it also removes the power of the TRAI to requisition from the government information or documents that are necessary to make such recommendations.
- Moreover, the Department of Telecommunications (DoT) will no longer be required to refer back to TRAI the recommendations for reconsideration, those recommendations that it does not agree with, as it was required to do previously.
4. INFORMATION SHARING- CONCERN OVER PRIVACY
- It obligates license 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.
- The users of the internet have a certain expectation of privacy which would be ultimately taken from them. Experts have called this an attack on people’s fundamental rights and freedoms, including that privacy and free expression.
- It has also been called an attempt to reinforce the colonial Indian Telegraph Act and an undoing of the progress made after the Supreme Court’s landmark Puttaswamy judgement.
5. OTT COMMUNICATION SERVICES AS TELECOMMUNICATION SERVICES
- The Bill expands the definition of “telecommunication services” to include OTT communication services as a consequence of this they may be subject to the same licensing conditions as TSPs(Telecom Service Providers).
TSPS ALLEGE OTT FOR USING THEIR RESOURCES
- Over-the-top (OTT) communication services refer to services that provide real-time person-to-person telecommunication services using the network infrastructure of telecom service providers like Airtel, Vodafone, and Jio.
- TSPs allege that these features result in a double whammy for them as OTT cuts into their sources of revenue (voice calls, SMS) while not having to deal with infrastructure and licensing costs that they have to undertake. Therefore, TSPs have been demanding a level playing field with OTT services.
THE WAY FORWARD:
- The Government must address the concerns related to the privacy of the users.
- According to the Supreme Court in the Puttaswamy judgment (2017), the right to privacy is a fundamental right and it is necessary to protect personal data as an essential facet of informational privacy. Thus, Draft Telecom Bill coupled with Personal Data Protection Bill 2019 should be revised, strengthened, and come into force to avoid concerns over Privacy.
- The role of the independent sector regulator, the Telecom Regulatory Authority of India (TRAI), and the Telecom Dispute Settlement and Dispute Tribunal (TDSAT) should be strengthened.
- The Bill places emphasis on the development of telecom infrastructure while covering new-age services to keep up with the times. The proposed legal framework seeks to be future-ready, provides certainty regarding spectrum management, and reserves the penalty of imprisonment or heavy fines only for a small set of critical offenses.
THE CONCLUSION: The Indian Telecommunication Bill, 2022 is a much-awaited move as India’s Digital space is expanding at a very rapid pace with new technologies and new players. It will not only address the present issues but will also provide a future-ready law.
Mains Practice Questions.
Q.1 What are the challenges and opportunities of the draft Telecom bill, 2022? How does it aims to bring uniformity in the Spectrum allocation process?
Q.2 What are the main constraints in the current regulatory framework in the Telecom Sector in India? Do you think that the Draft Telcom Bill, 2022 can address these constraints?
Q.3 “The Draft Telecom Bill, 2022 suffers from constitutional, administrative and regulatory challenges ” Comment.
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