While these technologies create new opportunities for social and economic growth, issues relating to dispute resolution and penalties, data privacy, the infrastructural needs of the industry, etc. become more complex.

With the objective of reforming the telecommunication law and making it more sensitive towards the concerns of this ever-evolving sector, a consultation paper on the “Need for a new legal framework governing Telecommunication in India”[1] was issued by the Department of Telecommunication on July 23, 2022, inviting comments.

The Consultation Paper proposed a new legal framework to address the following:

1. Simplification of the regulatory framework while ensuring regulatory certainty, minimising policy disruption, promoting investment, and preventing retrospective application.
2. Spectrum assignment should be to best serve the common good and widespread access, with utilisation of spectrum liberally and neutrally allowed, as should the deployment of new technologies, the repurposing and rearrangement of frequency range, and the authorisation of the central government to share, trade, lease, and surrender spectrum.
3. Provide a robust regulatory framework to obtain Right of Way and resolve disputes thereby ensuring the deployment of new technologies and ensuring continuous connectivity.
4. Simplify the framework for mergers, acquisitions, or other restructuring.
5. Ensure the license is not suspended or terminated during Insolvency while services are being provided, and ensure there is no default on license or spectrum dues.
6. Expanding the scope of the Universal Service Obligation Fund to address delivery of telecommunications service to underserved rural and urban areas.
7. Proportionate penalty for offences.
8. Address situations of public emergency, public safety, or national security.

The draft Telecommunication Bill 2022 was created in response to public feedback on the consultation paper [2].  Further comments on the draft have been invited till 20th October 2022. It intends to replace the Indian Telegraph Act, 1885; the Indian Wireless Telegraphy Act, 1933; and the Telegraph Wires (Unlawful Possession) Act, 1950.

Key Takeaways of the Draft Telecommunication Bill, 2022

Over-the-top (OTT)

There was an interpretational discord as to whether OTT is regulated under the current legal system. The government is of the opinion that OTT is adequately covered under the definition of “Telegraph” in the Telegraph Act. However, there is no explicit legal backing. The proposed bill explicitly clarifies that OTT communication services are a telecommunication service. The bill’s definition of telecommunication service incorporates current technological trends in the industry and includes voice and video communication services, machine-to-machine services, and broadcasting services. Any transmission and receipt of a message through a wire, radio, optical, or electromagnetic system would be telecommunication. Such telecommunication, when intended to be received by the general public, becomes a broadcasting service. Therefore, an OTT service provider, be it broadcasting/streaming services or data/video call services, falls explicitly within the ambit of the Telecommunications Bill, 2022.

User-Beneficial Provisions

The bill requires that the identity of the person sending a message be made available to the user receiving the message at all times. Therefore, any call recipient from a landline, cellular, or through OTT platforms like WhatsApp, Facetime, or Zoom calls will have information about the caller. To achieve this end, the KYC of all the users has to be obtained by all service providers, including OTT platforms.  Users are prohibited from providing false information about their identity when obtaining telecommunications services. Any misrepresentation of identity is punishable with imprisonment for one year or a fine of up to 50,000 rupees. An advertisement or promotional message, whether fictitious or real, shall not be sent unless consent is procured from the recipient. Any unsolicited message shall be an offense, and the sender is liable to be penalized. The Bill formulates a mechanism for the preparation and maintenance of the ‘Do Not Disturb’ register. The user-beneficial provisions and the penalty for violation are not substantial enough. When the losses caused to the public because of cyber frauds are more than 1 lakh crore each year, the penalty for such fraud of INR 50,000 is not a deterrent. It is ideal that such offenders are abstained from providing telecommunication services so that repeated cyber frauds or impersonations can be avoided.

Spectrum Allocation

The Bill provides that spectrum allocation can be done only through auction, directly under circumstances specified in the schedule, such as national security, or in such a manner as mentioned in the rules. The Hon’ble Supreme Court of India, in “Union of India & Ors v. Centre for Public Interest Litigation and other” decided on February 2, 2012, stated that:

“When it comes to the alienation of scarce natural resources like spectrum, etc., it is the burden of the State to ensure that a non-discriminatory method is adopted for distribution and alienation, which would necessarily result in protection of national/public interest. In our view, a duly publicised auction conducted fairly and impartially is perhaps the best method for discharging this burden and the methods like first-come-first-served when used for alienation of natural resources/public property are likely to be misused by unscrupulous people who are only interested in garnering maximum financial benefit and have no respect for the constitutional ethos and values. In other words, while transferring or alienating the natural resources, the State is duty bound to adopt the method of auction by giving wide publicity so that all eligible persons can participate in the process.”

The Hon’ble Supreme court’s order mandates spectrum allocation only via auction. However, allocation of Spectrum under extraordinary circumstances such as national security and defence by the Central Government is understandable. Nevertheless, the entire list of Schedule I activities wherein the government is authorized to allocate spectrum to BSNL/MTNL or can assign it to “any other function or purpose as determined” is far too wide to defeat the very purpose of the order.  Further, it is ideal that such spectrum allotted under Schedule I, shall not be resaleable but only returnable to the government.

The Bill provides the Central Government rights to repurpose the spectrum frequency for a different use (“re-farm”), rearrange the frequency range (harmonization), or assign part of the assigned spectrum to another entity for efficient spectrum utilization, or if the spectrum remains unutilized.

Seamless Transition 

There is a new set of terms and conditions that will be formed after the Act and rules come into force. A telecom service provider and telecom infrastructure provider have a choice on whether to migrate to the new set of terms and conditions under this bill or the existing terms as per their existing license. A wireless equipment provider has to procure new authorisation (instead of a license). The existing spectrum licenses shall continue to remain valid for a period of 5 years or until the date of expiry, whichever is earlier. The existing rules under the old Telegraph enactments shall continue until superseded by the new rules. All Telecommunication Bill provisions are prospective in nature. These mechanisms would allow greater acceptance of the new Act and a seamless transition.

Penalties and Offences

In casesof breach of the terms and conditions of a license, registration, authorisation, or assignment, the government can revoke, suspend, or curtail such approvals. Further, the government can impose a penalty based on the severity of the breach after considering whether it is severe, major, moderate, minor, or non-severe. A licensee can provide a voluntary undertaking to the authority with respect to any breach or delay. Acceptance of a voluntary undertaking will put the proceedings on hold. An alternative dispute resolution mechanism for resolving certain disputes or classes of disputes is envisaged. The Bill provides a list of offences covered by it, the imprisonment or fine imposed, and whether such offences are bailable or cognizable.

Right of Way

The mechanism for Right of way is differentiated on the basis of whether it is public property or private property. In the case of public property, the authority has to provide permission in a time-bound manner.  In the case of private property, parties may mutually negotiate an agreement. To overcome the issues of the sale of property along with the telecom infrastructure, an explicit provision has been enshrined to state telecom infrastructure is different from the property it is installed on. Therefore, the property owner cannot claim ownership of the tower in his/her property, and it remains independent of any sale or lease. It is ideal that the Right of Way arrangements/agreements be standardized. Further, the legal framework should also encompass penalties in case of violation of the Right of Way by either the telecom infrastructure provider or the property owner.

Common Ducts & Cable Corridors

An express provision is planned under which the Central Government will require infrastructure projects to have common cable ducts and cable corridors established and such cable made available to facility providers on an open access basis.

Restructuring & Insolvency

A licensee entity undergoing restructuring/merger/acquisition has to merely inform the authority and an explicit prior approval is not required. The restructured entity has to thereafter follow the rules therein. In case of insolvency, service continuity is given priority, and the entity retains control over Spectrum. An enabling framework has been made for the Central Government to intervene and revert the control of the Spectrum to the Central Government in case the entity fails to provide telecommunications services, and has promptly paid the spectrum licensing fees/charges.

Regulatory Sandbox

A regulatory framework of simplified license terms and conditions to empower the start-up ecosystem is formulated, whereby such entities can live-test their products and services in a controlled environment.

The Telecommunication Bill is a framework that intends to create a comprehensive and centralised legal ecosystem for an industry that is rapidly expanding with the addition of new players in the market, investments, and technology. How the Telecommunication Act, Digital Data Protection Act, and Digital India Act finally shape up to create a legal landscape to address the new technological challenges remains to be seen. The proposed Telecommunications Bill has addressed the concerns of the present while keeping an eye on the future in its simple, light-touch approach- a concrete step in the right direction.