While there is a pressing need to update the telecom regulatory regime to meet the challenges the industry faces today, the draft Bill must be revisited to ensure that oligopolistic patterns are not legislatively reinforced.
Why is the draft Telecommunication Bill, 2022 significant?
THE Department of Telecommunications introduced the draft Telecommunication Bill, 2022, after releasing a consultation paper in July, and inviting comments on the same. As per the Explanatory Note to the Telecommunications Bill, the Bill would repeal erstwhile legislation that governed telecommunication such as the Indian Telegraph Act, 1885, the Wireless Telegraphy Act, 1933 and the Telegraph Wires (Unlawful Possession) Act, 1950.
Technologies in telecommunications have undergone a sea change since telegraphs of the colonial era. The Bill removes obsolete terms such as ‘telegraph’ and ‘telegraph officer’, and introduces terms relevant to the modern day realities, like ‘telecommunication’, ‘telecommunication network’, and ‘telecommunication service’. The Bill also draws inspiration from similar legislation in jurisdictions, such as the United States, the United Kingdom, the European Union, Australia, Singapore, and Japan.
The Bill caters to the longstanding demand of telecom companies to regulate Over-The-Top (‘OTT’) platforms and claims to give telecom companies a level-playing field to compete with the OTT platforms. OTT platforms, such as WhatsApp or Signal, provide competing services such as calling and messaging services without any of the costs associated with maintenance of the network infrastructure, thus enjoying a “free ride” on the telecom companies’ networks until now.
To begin with, some of the Bill’s provisions will make business easier for the telecom companies. To address the current challenge where cases keep piling up even in situations of minor violation, (ranging from complaints of violation of do not disturb registration at consumer courts to disputes brought before the Telecom Disputes Settlement and Appellate Tribunal), the Bill includes provisions for resolution based on voluntary undertakings made by a licensee or registered entity or assignee, to rectify violations alleged against them. This approach seeks to bring relief to the telecom ecosystem in terms of dispute resolution costs since once such a voluntary undertaking is accepted by the Union Government, it bars any proceedings against the entity.
The Bill also simplifies the framework for the restructuring of any entity, by only requiring the entity to comply with the scheme for restructuring as provided under the Companies Act, 2013 and inform the Department of Telecommunications, as required.
What does the Bill get wrong?
Regulation of OTTs
One of the main critiques of this Bill is the inclusion of OTT services like WhatsApp, Signal, and so on within the ambit of the Bill. In a single stroke, this makes telecom companies and OTTs subject to the same licensing conditions, that is, the Unified Access Service License. This licence includes several conditions such as maintaining ‘Know your Customer’ details of users, adherence to certain encryption regulations, and allowing the government access to their equipment and networks. Critics fear that this is a step towards eroding the right to privacy of the individual, and would lead to decreasing competition and innovation in the industry.
Diluting TRAI’s role
The Telecom Regulatory Authority of India’s (‘TRAI’) limited role has been further curtailed under this Bill. Under the TRAI Act, the recommendations of TRAI were not binding, but the government had to seek TRAI’s recommendations in matters of need and timing for the introduction of a service provider, as well as the terms of the licence to such a provider. TRAI also had the power to seek from the government such documents and information necessary to make such recommendations. Instead of strengthening the role of TRAI as an independent regulatory body, the Bill undermines its role by stripping TRAI of all the recommendatory powers.
Provisions on internet shutdowns
Currently, internet shutdowns are ordered under the Telecom Services (Public Emergency and Public Safety) Rules, 2017 made under the Indian Telegraph Act. The Bill introduces provisions enabling the government to order such shutdowns. Under the Bill, the Union or state government, or any officer authorised for this purpose, can shut down internet services and take possession of any telecommunication services/network on “the occurrence of any public emergency” or “in the interest of public safety”. The Bill also does not set any limits on the duration of validity of such orders.
This will give enormous leeway to government officials to impose internet shutdowns and ignores prior jurisprudence on the matter. For instance, safeguards recommended by the Parliamentary Standing Committee on Information Technology, and the Supreme Court in decisions such as Anuradha Bhasin versus Union of India (2020), which included selective banning of services (such as messaging services, so that other internet users are not hampered), using a transparent procedure for imposing internet shutdowns that follow the principle of proportionality, ensuring that such orders are published, prescribing validity of orders for a limited period of time, and making orders subject to review by an appropriately constituted Review Committee, have been disregarded in the Bill.
Another concern is that a few players in the market, that is, Reliance Jio, Airtel, and to a lesser extent, Vodafone-Idea, are increasingly achieving dominant positions. These concerns are even more relevant in the context of the upcoming introduction of 5G services in India, since Reliance Jio, Airtel, Vodafone Idea and Adani Data Networks have won a total of 51,236 MHz spectrum worth Rs. 1,50,173 crore in the 5G spectrum auctions. It has been suggested that while the new Bill empowers the government to ensure competition in the industry, Jio and Airtel are likely to dominate the 5G rollout, thus stifling competition.
Is the concern of administrative overreach valid?
A feature of the Bill that raises concerns of administrative overreach and abuse of tax-payer money is in the way it provides relief in situations of insolvency of the telecom companies. The Bill permits the Union Government, acting through the Department of Telecommunications, the authority to defer and waive payments in extraordinary circumstances. There is widespread concern that this provision may be used to benefit ailing telecom operator Vodafone-Idea, which owes a large portion of its Rs. 2-lakh-crore debt to the Union Government.
The Bill also takes the approach of highway and other infrastructural authorities, in acquiring land for infrastructural development. It allows “facility providers” to apply for a Right of Way (‘RoW’) to any public entity or other private persons to access land in their control to establish telecom equipment. A public entity must grant such permission expeditiously and can reject applications only on substantive grounds. Even if a private party does not provide the RoW as requested, the Union Government (through itself or through any other authority that it designates for this purpose) may proceed to grant the RoW to the facility provider if it deems that such RoW should be granted for the public interest. The Bill then includes an enabling provision to create a dispute resolution framework relating to this.
Lastly, the Bill has introduced certain measures to “protect the common consumer”, like making entities with licences under the Act identify its customers, so that a user can know the identity of the sender of any message she receives. However, this has led to concerns about the privacy of individuals who may now be required to comply with detailed Know-Your-Customer requirements, even for end-to-end encrypted OTT platforms such as Telegram or Tinder. Provisions also seek to deal with “specified messages” (defined as messages advertising goods, services, interest in property, and so on irrespective of whether these are real or fictitious), and enable the Union Government to introduce measures to protect users.
What is the way forward?
From the perspective of a common consumer, one of the most important concerns is the protection of their right to privacy. In the absence of a data privacy legislation in India, the provisions of the Bill that seek to identify all users, and allow the government to have surveillance powers over various OTT services such as WhatsApp, fail to adequately protect user privacy at the individual level. Further, the very basis for bringing OTTs on a “level playing field” as the telecom companies has been questioned, since the former control the underlying broadband access infrastructure, and are the real gatekeepers to broadband internet access.
Admittedly, there is a pressing need to update the telecom regulatory regime to meet the challenges the industry faces today. However, the draft Bill must be revisited to ensure that oligopolistic patterns are not legislatively reinforced.
(Pacta founder Nivedita Krishna has guided the writing of this article.)