The draft Telecommunication Bill, 2022
Background
The Ministry of Communications released a draft of the Indian Telecommunication Bill, 2022 last week for public comments. Since then, the draft has generated a significant amount of discussion on various changes that it proposes to make to the current telecom regulatory framework.
What is the draft Indian Telecommunication Bill, 2022?
- It seeks to replace the age-old laws such as Indian Telegraph Act enacted in 1885, the Indian Wireless Telegraphy Act enacted in 1933 and the Telegraph Wires (Unlawful) Possession Act in 1950.
How does the draft telecommunication Bill affect OTT/over-the-top communication services?
Over-the-top (OTT) communication services refer to services that provide real time person-to-person telecommunication services. Some popular examples of these include messaging platforms like Whatsapp, Telegram, Signal, Messenger, Duo, Google Meet etc. These platforms use the network infrastructure of telecom service providers like Airtel, Vodafone and Jio and provide features that compete with telecommunication services such as voice calls and SMS services.
Telecom Service Providers (TSPs) allege that these features result in a double whammy for them as they cut into their sources of revenue (voice calls, SMS) while not having to deal with infrastructure and licensing costs that they have to undertake.
Therefore, TSPs have been demanding a level playing field with OTT services.
The current draft of the Bill expands the definition of “telecommunication services” to include OTT communication services. As a consequence of this, OTT telecommunication services may be subject to the same licensing conditions as TSPs.
If OTT communication services are required to obtain the same licence, they would also be subject to a number of conditions such as maintaining ‘know your customer’ details of their users, adhering to certain encryption regulations and allowing lawful access to the government of their equipment and networks.
What are some of the consumer protection measures in the draft Bill?
To curtail the ever-increasing incidence of spam calls and frauds, the draft Bill proposes that the identity of the person communicating using any form of telecommunication services shall be available to the user receiving such communication.
This would mean that unlike now where only the phone number of the person making the communication is displayed, going forward the name of the person would also be displayed. As per the Communications Minister, this facility would not only be available for voice calls but also for users of OTT communication services.
To ensure that a user provides correct details, the draft Bill penalises providing wrong identification details with a ₹50,000 fine and suspending the operation of the specific mobile number or barring the person from using the telecom service for a certain duration.
Further, the draft Bill also provides that commercial communications which are advertising and promotional in nature should be made only with the prior consent of a subscriber.
While the Telecom Regulatory Authority of India (TRAI) has previously issued the “Telecom Commercial Communications Customer Preference Regulations” in 2018, spam communications and sharing of contact details without any safeguards continues to be rampant. Its inclusion in the draft Bill takes it out from the purview of TRAI and gives government the power to take stringent measures against violators.
How does the draft Bill impact the position of the TRAI?
The TRAI was set up in 1997 as an independent and specialised regulator for the telecom sector. Given that the government is a major player in the telecom sector in various roles such as provisioning of services, licensing and allocating spectrum, the need was felt to institute a regulator that is at an arms’ length from the government to ensure a level playing field, fairness for private TSPs and for the protection of consumer interests.
However, the current draft considerably dilutes TRAI’s position in a number of ways reducing it from a regulatory to a recommendatory body.
- First, the government would no longer be required to seek recommendations from the TRAI before issuing licences.
- Second, it also removes the power of the TRAI to requisition from the government information or documents that are necessary to make such recommendations.
- Moreover, the Department of Telecommunications (DoT) will no longer be required to refer back to TRAI the recommendations for reconsideration — those recommendations that it does not agree with, as it was required to do previously.
The removal of such powers would not be keeping with international practice where telecom regulators are endowed with a greater degree of independence to ensure that investor confidence and consumer protection is maintained in the market.
What are the draft Bill’s provisions on internet shutdowns?
For the first time in the Indian legal framework, a specific provision enabling the government to order suspension of internet power has been introduced through the draft Bill.
Currently, suspension of internet services is ordered under the Temporary Suspension of Telecom Services (Public Emergency and Public Safety) Rules, 2017 that have been made under the Indian Telegraph Act, 1885.
However, civil society has raised concerns that the proposed provision gives the government power to order internet shutdowns while failing to incorporate safeguards such as judicial oversight that have been recommended by the Standing Committee on Information Technology.
How does the Bill facilitate TSPs?
The draft Bill clears up a lot of confusion around the allocation of spectrum. It lays down that while the primary route for allocation of the spectrum is auction, when spectrum is to be allocated for certain functions of the government such as defence or transportation, the administrative process is to be followed.
It also allows the TSP to exploit its spectrum resource fully by enabling sharing, trading, leasing, surrendering or returning unutilised spectrum. The Bill also simplifies the process for restructuring, merging or demerging.
On the issue of right of way (the legal framework for setting up telecom towers), it mandates that land owned by a public entity should be available expeditiously unless there is an express ground of refusal. This is likely to face opposition from States which have the power to administer lands within their territorial jurisdiction.
Lastly, the draft allows the funds under the Universal Service Obligation Fund to be utilised for other purposes such as urban areas connectivity, research etc, expanding its current mandate from the limited aspect of enhancing rural connectivity.
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Steve Ovett, the famous British middle-distance athlete, won the 800-metres gold medal at the Moscow Olympics of 1980. Just a few days later, he was about to win a 5,000-metres race at London’s Crystal Palace. Known for his burst of acceleration on the home stretch, he had supreme confidence in his ability to out-sprint rivals. With the final 100 metres remaining,
[wptelegram-join-channel link=”https://t.me/s/upsctree” text=”Join @upsctree on Telegram”]Ovett waved to the crowd and raised a hand in triumph. But he had celebrated a bit too early. At the finishing line, Ireland’s John Treacy edged past Ovett. For those few moments, Ovett had lost his sense of reality and ignored the possibility of a negative event.
This analogy works well for the India story and our policy failures , including during the ongoing covid pandemic. While we have never been as well prepared or had significant successes in terms of growth stability as Ovett did in his illustrious running career, we tend to celebrate too early. Indeed, we have done so many times before.
It is as if we’re convinced that India is destined for greater heights, come what may, and so we never run through the finish line. Do we and our policymakers suffer from a collective optimism bias, which, as the Nobel Prize winner Daniel Kahneman once wrote, “may well be the most significant of the cognitive biases”? The optimism bias arises from mistaken beliefs which form expectations that are better than the reality. It makes us underestimate chances of a negative outcome and ignore warnings repeatedly.
The Indian economy had a dream run for five years from 2003-04 to 2007-08, with an average annual growth rate of around 9%. Many believed that India was on its way to clocking consistent double-digit growth and comparisons with China were rife. It was conveniently overlooked that this output expansion had come mainly came from a few sectors: automobiles, telecom and business services.
Indians were made to believe that we could sprint without high-quality education, healthcare, infrastructure or banking sectors, which form the backbone of any stable economy. The plan was to build them as we went along, but then in the euphoria of short-term success, it got lost.
India’s exports of goods grew from $20 billion in 1990-91 to over $310 billion in 2019-20. Looking at these absolute figures it would seem as if India has arrived on the world stage. However, India’s share of global trade has moved up only marginally. Even now, the country accounts for less than 2% of the world’s goods exports.
More importantly, hidden behind this performance was the role played by one sector that should have never made it to India’s list of exports—refined petroleum. The share of refined petroleum exports in India’s goods exports increased from 1.4% in 1996-97 to over 18% in 2011-12.
An import-intensive sector with low labour intensity, exports of refined petroleum zoomed because of the then policy regime of a retail price ceiling on petroleum products in the domestic market. While we have done well in the export of services, our share is still less than 4% of world exports.
India seemed to emerge from the 2008 global financial crisis relatively unscathed. But, a temporary demand push had played a role in the revival—the incomes of many households, both rural and urban, had shot up. Fiscal stimulus to the rural economy and implementation of the Sixth Pay Commission scales had led to the salaries of around 20% of organized-sector employees jumping up. We celebrated, but once again, neither did we resolve the crisis brewing elsewhere in India’s banking sector, nor did we improve our capacity for healthcare or quality education.
Employment saw little economy-wide growth in our boom years. Manufacturing jobs, if anything, shrank. But we continued to celebrate. Youth flocked to low-productivity service-sector jobs, such as those in hotels and restaurants, security and other services. The dependence on such jobs on one hand and high-skilled services on the other was bound to make Indian society more unequal.
And then, there is agriculture, an elephant in the room. If and when farm-sector reforms get implemented, celebrations would once again be premature. The vast majority of India’s farmers have small plots of land, and though these farms are at least as productive as larger ones, net absolute incomes from small plots can only be meagre.
A further rise in farm productivity and consequent increase in supply, if not matched by a demand rise, especially with access to export markets, would result in downward pressure on market prices for farm produce and a further decline in the net incomes of small farmers.
We should learn from what John Treacy did right. He didn’t give up, and pushed for the finish line like it was his only chance at winning. Treacy had years of long-distance practice. The same goes for our economy. A long grind is required to build up its base before we can win and celebrate. And Ovett did not blame anyone for his loss. We play the blame game. Everyone else, right from China and the US to ‘greedy corporates’, seems to be responsible for our failures.
We have lowered absolute poverty levels and had technology-based successes like Aadhaar and digital access to public services. But there are no short cuts to good quality and adequate healthcare and education services. We must remain optimistic but stay firmly away from the optimism bias.
In the end, it is not about how we start, but how we finish. The disastrous second wave of covid and our inability to manage it is a ghastly reminder of this fact.