Industry leaders respond to Draft Telecom Bill, some have concerns

The Telecom Bill, which will regulate the telecom sector once it becomes an Act, seeks to replace the existing legal framework governing telecommunication in India, comprising the Indian Telegraph Act, 1885, the Wireless Telegraphy Act, 1933 and the Telegraph Wires (Unlawful Possession) Act, 1950.

The draft Indian Telecommunication Bill, 2022 has, for the first time, laid down a clear statutory framework and regulations on assigning spectrum.

Lt. Gen. Dr. SP Kochhar, Director General, COAI
“The draft Indian Telecommunications 2022 Bill is another milestone step toward developing a modern and future-ready legal framework in telecommunication. In keeping with the recent trend of reformative policy making by the Govt, this draft Indian Telecommunication bill is another milestone step to develop a modern and future-ready legal framework in telecommunication. We are studying the newly drafted Bill and will share our comments with the Government in due course of time.”

TR Dua, Director General, DIPA
“The New Draft Indian Telecommunication Bill, 2022, is going to be a forward looking and path breaking set of reforms for the telecommunication sector. It was awaited for a long time as Indian telecom sector and its existing regulatory framework for the telecommunication sector is based on the Indian Telegraph Act, 1885. The nature of telecommunication, its usage and technologies have undergone a massive change since the era of ‘telegraph’. That is the reason government has taken up this long-awaited initiative to restructure the legal and regulatory framework for the telecommunications sector.

This new bill is going to revolutionize the telecom sector by addressing many issues most important among those being Right of Way for Telecommunication Infrastructure. It intends to remove the ambiguities prevailing for long time by establishing that telecom is central subject. For example, it addresses the long-standing issue of illegal property tax on telecom towers as this bill clarifies that Telecommunication infrastructure is distinct from property on which it is installed. It also addresses the very important ambiguity regarding public and non-public properties and application of telecom law accordingly. We hope this will provide clarity and reduce hindrances at the local ground level while rolling out of telecom infrastructure. Similarly, it is also touching upon various other important aspects. Being in simple language, this bill is truly for the common man and will go a long way in establishing standard that how legal framework should be for common man to understand and hope it does minimize litigations. We profusely thank our government and DoT for this very important bill. We will surely give our inputs accordingly in due course for further improving it and we are sure that it will come out as role model for the other countries as well.”

Jaideep Ghosh, chief operating officer of legal firm Shardul Amarchand Mangaldas & Co
“Continuing on the path of reforms, the draft bill proposes a comprehensive framework to further enhance ease of doing business. Clarity has been provided on spectrum allocation, restructuring, insolvency, and user protection among others. OTT is proposed to be considered as a telecom service, which may see some developments.”

Prashant Tarwadi, Director (Large Corporates), India Ratings & Research
“The draft Bill implies that ownership of spectrum remains with the government, and value of spectrum cannot be sold by creditors under the Insolvency and Bankruptcy Code (IBC). Government reserves the right to take back the spectrum if the ailing telecom operator fails to pay government dues. The proposed Bill may not accelerate resolution of stressed assets.”

Tony Verghese, Partner, JSA
“The Indian Telecommunications Bill, 2002, is indeed a great move and a long awaited one. It has been a challenge for the telecom industry dealing with archaic laws for the last 3-4 decades, particularly the Indian Telegraph Act which was enacted during the 19th Century including others which will now be repealed. The new Bill has taken account the current gambit of services being offered using different forms of technology such as over-the-top (OTT), internet services via satellite-based communication services, in-flight and maritime services, broadcasing, internet, and broadband services, which will now fall within licensed services.”

Shiv Putcha, Founder and Principal Analyst, Mandala Insights
“Including OTT under telecom is contentious. May create a level-playing field between telcos and OTT. Language suggests greater centralisation of powers.”

Peeyush Vaish, Partner & Telecom Sector Leader, Deloitte India
“Govt will not change rules with retrospective effect. OTT services may have to verify their users. Bill says grant of RoW should be non-discriminatory.”

Kazim Rizvi, founding director, The Dialogue
“While there are some positive steps taken, the Bill also includes specific issues related to coverage of internet-based services and increased power of surveillance. It needs to be kept in mind that OTT communication platforms are already regulated under the IT Act where there are safeguards to protect the interest of consumers and keep the platforms in check. Added regulatory burden would increase the compliance cost and curb innovation in the sector.

Telecom and internet-based communication platforms are different and should not be regulated together. The communications data through a Web platform is delivered in the form of data packets which is in contrast with the traditional service provided by the telecom service providers that perform functions on atop circuit-switched PSTN architectures where dedicated channels of communication are established between the devices for communication.”

Anushka Jain, associate counsel for surveillance and transparency, Internet Freedom Foundation
“Telecom service providers provide access to the internet and control the entire infrastructure, which is not the case with internet-based platforms. OTT providers just provide the service. So, you can’t access the OTT providers before engaging with telecom service providers.”

Jason Oxman, CEO, Information Technology Industry Council
“The law is well intentioned. The telecom law in the country is due for an update, but the definition of regulated services expands the jurisdiction of the telecom regulator so massively that it creates a risk of serious damage to the potential success of the digital economy in India. The OTT services should not have a government intersection because there is no chance of market failure. If this is legislated, it would eliminate the security benefits of end-to-end encryption because the government may have the powers to intercept messages.”

Salman Waris, managing partner, TechLegis Advocates & Solicitors,
“In the long run, the government could use the level playing field argument to push the Bill as is because end-to-end encryption offered by many OTT players has been a bone of contention. Intermediary rules obligate apps to provide on-demand information to law enforcement agencies while apps, citing encryption, express their inability to do so. Telecom operators demand the regulation of OTT players because they offer the same set of communication services.”

Other comments from analysts:
“The Centre cannot take coercive action against states or municipal corporations to impose ‘right of way’ rules, as land is a state subject.”

“The Bill will adversely impact the consultative role of TRAI, weakening its position. It excludes the obligation of the government to consult TRAI on licensing issues.”

Overall, 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 offences.

CT Bureau