Draft National Digital Communications Policy: One that brings Hope and Resurgence

The Draft National Digital Communications Policy (DNDCP) infuses hope and enthusiasm in a crucial economic sector that is the backbone of digital dreams of India. The government has always ensured that the policy and regulation keep pace with advancing technologies and a fast changing world. It should be lauded for its efforts for revising its sector goals, objectives, and missions about four times in the last two decades in order to fine-tune the policy. In a first, the policy now moves away from telecom and takes the new role of digital to capture the realities of a fast growing new converged world. Previous policies pertained only to telecommunications and this is a giant step in the right direction toward ubiquitous broadband and an all-encompassing strategy focused on consumers, goals, and outcomes. Through the three action paths – Connect India, Propel India, and Secure India, DNDCP addresses issues in the digital world.

Like never before, the proliferation of broadband is at the core of the policy. It addresses broadband infrastructure in the very first objective – Connect India. With the help of this, the government plans to provide universal broadband coverage at 50 Mbps to every citizen, 1 Gbps connectivity to all gram panchayats by 2020 and 10 Gbps by 2022, and enable 100 Mbps broadband on demand to all key developmental institutions, enable fixed-line broadband access to 50 percent of all Indian households, achieve unique mobile subscriber density of 55 by 2020 and 65 by 2022 and ensure connectivity to all uncovered areas. The implementation and the efficiency of these services would prove to be key enablers of Digital India.

Furthermore, Connect India additionally declares a Fiber First Initiative that constitutes setting out a system of optical fiber links all through the nation for fast internet. Right now, just around 20 percent of our towers are fiber-associated and this genuinely constrains the nature of data connectivity. However, expanding the fiberization of towers to 60 percent as talked about in the policy can significantly enhance connectivity.

Poor business viability along with extremely high license fee levies and spectrum usage charges has been the biggest challenge before the sector and the NDCP has tried to address these by talking about reviewing levies and fees including License Fee…” A phrase used in earlier policies but this time the draft states that it will apply the concept of pass through revenues with input line credit. This will reduce the effective license fee burden on the sector by avoiding double taxation. This would allow more investments to flow in and increase the competition in the infrastructure industry by making virtual network operators viable.

The draft has also tried to rationalize Spectrum Usage Charges (SUCs) to reflect the costs of regulation and administration of spectrum, something which is parallel to international practices. These spectrum-related vital actions together with the rationalized license fees and levies with input line credit would remarkably transform the viability of the sector and make USD 100 billion and more investments will certainly flow in.

Spectrum is the life-blood of mobile broadband and a lot needs to be done in this area. The draft policy addresses this boldly and comprehensively. Till date, extraction of maximum revenue from spectrum sale has been the norm leading to much unsold spectrum, thus greatly reducing the many-fold higher socioeconomic benefits that are possible from the spectrum put to use in networks. For the first time in India’s history, policy is recognizing spectrum as a key natural resource for public benefit to achieve India’s socio economic goals. This effectively means an optimal design of auctions and optimal reserve price and valuation of spectrum. Review of objectives of spectrum management so as to maximize socio-economic goals and publishing annual spectrum utilization and availability roadmap for communication needs is severely needed. The recommendation to encourage/incentivize government departments to free unutilized/substitutable spectrum so that the same can be utilized for more productive use is welcome. There is a need to ensure adequate availability of a contiguous, broader, and globally harmonized spectrum.

High reserve price is the single most important factor that has led to tepid response in auctions and also failure of auction that is determined by a large extent of spectrum remaining unsold and the clearing price remaining just the same as the reserve price or marginally above it. The proposed policy suggests optimal pricing of spectrum to ensure sustainable and affordable access to digital communications.

As India moves toward greater inclusion, the draft stipulates a review of the scope and modalities of the Universal Service Obligation Fund (USOF) as well as the targeted channelizing of the Fund for achieving inclusion. While the BharatNet and GramNet initiatives focus on proliferation of broadband to rural areas through the establishment of a National Broadband Mission – Rashtriya Broadband Abhiyan, NagarNet aims to do the same in urban areas.

The other biggest challenge in the sector relates to quality of service, customer satisfaction, and grievance redressal. Currently, individuals cannot approach the TDSAT, and consumer courts lack efficiency when dealing with issues related to modern digital communications. Here, the policy has suggested solving this issue by creating a telecom Ombudsman. Moreover, a web-based complaint redressal system is also expected to be set up.

The policy speaks of investments up to USD 100 billion in the next 5 years. Investments flow to a sector when businesses are viable/profitable and make commercial sense. There are a lot of initiatives under the policy that will foster investments into the sector. Apart from reviewing levies and fees, the concept of pass-through revenues in line with principles of input line credit will go a long way in attracting investments. The proposal to accord telecom infrastructure the status of Critical and Essential Infrastructure will help raise low-cost funds similar to other connectivity infrastructure such as roadways, railways, waterways, airlines. The policy also proposes several initiatives for ease of doing business, which will remove roadblocks for investors.

Our country is seriously deficient in wi-fi and a bare minimum of 32,000 hotspots do not provide broadband to one and all. The global norm is approximately one public wi-fi hotspot for every 150 people. Interestingly, by global norms, we should have eight million hotspots which are more than 200 times we possess. The policy targets to supply five million hotspots by 2020 and 10 million by 2022 as DoT has reportedly accepted TRAI’s recommendations on wi-fi liberalization and are trying to improve significantly by providing the broadband facility that is sorely needed.

While India has made giant strides in strategic satellite initiatives, there is enormous scope for improvement in the area of commercial satellite communications (satcom). Satcom can be far more affordable than it is today through adoption of modern technologies as well as through optimized policies and regulations. This important area has never been addressed in earlier policies whereas the draft policy, in at least three substantive sub-sections, covers important action-items that could drive the use of satcom for connecting the unconnected.

The policy envisages expanding the Internet of Things (IoT) network to encompass 5 billion connected devices by simplifying the licensing and regulatory framework. It also aims to earmark unlicensed spectrum space for IoT services, which will future-proof the use of IoT devices looking ahead.

The policy also aims to establish a strong, flexible, and robust data-protection regime so that each citizen and enterprise can operate with autonomy and be given the freedom of choice. More importantly, the NDCP wants to enforce security standards that are at par with global standards with consideration for local requirements.

The draft policy is a result of multiple rounds of intense open and transparent consultations spanning a period of over 6 months and offers a lot to all stakeholders in the eco-system. There is a lot to cheer about innovation-led incentives, investor-friendly regime and simplification of regulations for the telecom industry. The policy has indeed sounded the clarion call of hope and resurgence for this vital economic sector, which has been a flag-bearer of liberalization and reforms in the economy.

The writer is honorary fellow, IET (London). The views are personal. Garima Kapoor provided research inputs for this article.