In pursuit of modern governance and a regulatory framework
Across the world, the communications sector is experiencing unprecedented churning, and India is no exception. Innovations in technology, data usage, artificial intelligence (AI), growing internet coverage, integration of commerce and payments with communications, have unlocked use cases and opportunities hitherto unheard of.
Along with benefits, challenges in preserving consumer interest, fostering ubiquitous access, improving quality of services (QoS), preventing harm and fraud, ensuring optimal competition, and enabling appropriate usage of natural resources, are increasing. This has brought policymakers back to the drawing board to rethink regulatory and governance framework for the Indian communications sector.
Late last year, the Department of Telecommunications (DoT) released the draft Indian Telecommunications Bill (Telecom Bill) to replace pre-independence laws governing the sector. It provides some clarity on the contentious issues of spectrum allocation, and brought hope to the sector facing wrath of the judiciary, which has led to the government acquiring equity in a telecom player, upon conversion of its pending dues. To prevent recurrence of concerns regarding abuse of discretion, and procedural irregularities, the DoT could consider adopting principles laid down by the Ashok Chawla Committee on Allocation of the Natural Resources.
It appears that the DoT is also examining whether to license 6GHz spectrum band, or open it for license-exempt Wi-Fi use. This, and other such deliberations regarding spectrum usage, should be transparent and inclusive. All stakeholders, including consumer groups, must be able to provide their suggestions. Decisions made through holistic consideration of different perspectives in a transparent manner have a greater potential to withstand public scrutiny, and foster stakeholder trust.
The telecom bill also recognizes the need for affordable, reliable, secure, and universal telecommunication services. An enabling, proportionate, and risk-based framework is necessary to achieve these objectives. However, it suggests an expansive definition of telecommunication services, which includes broadcasting, electronic mail, video of data communication services, and over-the-top communication services, among others. It thereby proposes to strictly and similarly regulate both carriage and content, and players may be required to obtain license from the DoT for offering content services, which could potentially be argued as over-regulation.
While regulatory parity seems to be the intent by subjecting all players to stringent regulations, similar treatment of dissimilarly placed entities has the potential to uneven the playing field. Instead, the telecom bill should have proposed to reduce the unreasonable regulatory burden on telecom service providers to foster innovation and competition.
Moreover, some of the content service providers are already regulated as internet intermediaries and publishers by the Ministry of Electronics and Information Technology (MeitY), which is also driving discussions on the draft Digital Personal Data Protection Bill (DPDPB), and soon-to-be-released Digital India Bill. These legislations are likely to significantly impact communications services, potentially creating overlaps.
At present, the Information Technology Act, 2000, and the rules made thereunder by MeitY, require such players to undertake robust due diligence, and put in place appropriate grievance redress mechanisms. The DPDPB requires them to protect privacy, prevent data from breach, misuse, and cyberattacks. Sector-specific regulators like the Reserve Bank of India have imposed additional obligations to protect financial transactions and information. On the top of these, the Department of Consumer Affairs is empowered to issue rules for consumer protection. Regulations by such multiple agencies, despite good intentions, have the potential to result in overlaps and inconsistencies. There is need to ensure regulatory coherence to gain and sustain investor and consumer trust and confidence in the sector.
The telecom bill also intends to dilute powers of the telecom regulator, the Telecom Regulatory Authority of India (TRAI), by providing key role to the DoT in regulating tariffs, among other issues. However, the TRAI continues to issue tariff orders for broadcasters, which have been challenged in courts, potentially creating ambiguities. The TRAI has also proposed to mandate display of caller name on phone of call recipients, through creation of a centralized database. This could have privacy and security implications, and unintended consequences for victims of abuse, whistleblowers, journalists, and innocuous consumers, who do not wish to reveal their identity. It has also set up a joint committee with the financial regulators for curbing unsolicited communication and spam and fraud calls through use of distributed ledger technology and AI, and is also reviewing QoS in 5G services, a key focus of the Union Budget 2023-24.
However, it is not clear if the TRAI will have necessary enforcement powers and capacity to act as a deterrent against deterioration in QoS and increasing spam calls. it has also issued a consultation paper on enabling convergence of carriage of broadcasting and telecommunications services. It appears that the Ministry of Information and Broadcasting is not convinced with the idea and thinks that both should remain separate. The Department of Space is also likely to have a say on the issue.
Consequently, the regulation and governance of communications sector is likely to get further overcrowded owing to interest of several government and regulatory agencies, which runs the risk of uncertainty and inconsistency in the approach to governance.
Fostering growth of the sector in a manner that addresses emerging harms demands predictable, consistent, responsive, and responsible governance and regulatory frameworks. This would require the government, the regulatory, and judicial agencies to work closely than ever before, have conceptual clarity, open communication channels, and keep an ear on the ground.
This can be ensured by adopting robust processes to collect evidence, examine impacts of proposed regulations, and create regulatory buy-in. Institutionalizing regulatory impact assessment (RIA) framework can be a way forward in this regard. It helps in sound and objective decision making, promoting regulatory certainty, while minimizing legal challenges.
In addition, to improve coherence and avoid inconsistencies, it might be useful to prescribe formal coordination mechanisms in the law. These should not be mere checkbox exercises, but discussions and decisions of inter-regulatory meetings must be available in public domain for scrutiny. Use of practices like regulatory sandbox, regulatory technology, and supervisory technology tools, can also aid in timely detection of risks and appropriate responses by relevant regulators in unison. Such a unified front can also aid in proactively contributing to discussions around standard setting for emerging services at the international level.
Such innovations can enhance stakeholder trust and confidence in regulatory decisions through public consultations, and commitment to transparency and non-discrimination. Already, communications regulators in about 50 countries conduct RIA before regulatory decisions are made. Several regulators have also integrated technology in supervision and market monitoring. Adoption of practices like RIA can truly modernize governance and regulatory framework for Indian communications sector. What are we waiting for?
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