Telecom Bill seems headed to compromising checks and balances in place

Any effort by the government at replacing century old laws is a step in the right direction as it helps in ease of doing business and dealing with new and emerging technologies. In that sense, the intent of the government behind bringing the draft Indian Telecommunication Bill 2022 is understandable as it seeks to replace the Indian Telegraph Act 1885, and the Indian Wireless Telegraphy Act 1933. The draft Bill has a number of positive features such as reducing the quantum of fines that can be levied on companies for specific violations and assigning spectrum administratively if need be. While placing the draft in the public domain and seeking stakeholders’ comments is certainly laudable, what defeats the purpose is that the drafting seems to have not been done in a transparent manner. True, industry associations were asked to send their inputs, but these were never placed in the public domain. Even consultations between different wings of the government seem to have been given a pass.

Take the dilution of the powers of the Telecom Regulatory Authority of India (TRAI) proposed in the Bill. While it can be argued that the changes in TRAI’s powers are being made only with regard to the policy-making aspects, and not the tariff part where the regulator is supreme, the reality is that it upsets the fine balance currently in place. Section 11 of the TRAI Act 1997 lays down that for any policy change, the government needs to first seek the recommendations of the telecom regulator. It can finally decide to deviate from these, but the process definitely brought transparency to the entire exercise as TRAI made the consultation process public. The draft Bill seeks to change this provision. Once the Bill becomes a law, it would be up to the government’s sweet will whether to seek TRAI’s inputs on any given issue or not. If the government chooses not to refer a matter to the regulator, the entire process of arriving at a decision will become opaque. For instance, industry or the public will never get to know the methodology of setting reserve price for spectrum auctions. This, sadly, is a retrograde step which runs the risk of taking away even good measures like vesting powers in the government to waive penalties on companies or assigning spectrum administratively as the motive could be questioned.

The other aspect on which the draft Bill fails to provide a clear roadmap is with regard to insolvent telecom operators given the position of the department of telecommunications remains the same as before—that the government’s dues should be cleared first, else, spectrum should be returned as the companies concerned hold it on lease and, upon default, lose all right over it. This is precisely the reason why resolution plans of Aircel and Reliance Communications are still hanging. Since DoT is an operational creditor as per the definition laid down by the IBC, its claim comes after financial creditors (banks); so, the right way on this front would have been to hold consultations with the ministry of corporate affairs to arrive at a a workable solution. On most other matters, the Bill talks of good intent, but the clauses are very broad and sweeping in nature. The final draft will hopefully ensure that the improvised clauses do not become a tool in the hands of the officials to hand out arbitrary decisions and compromise the checks and balances which are in place. Financial Express