The Telecommunications Bill, 2023, recently passed by the Parliament received the President’s assent on 24th December 2023. It repealed the Indian Telegraph Act of 1885, the Indian Wireless Telegraphy Act of 1933, and the Telegraph Wires (Unlawful Possession) Act of 1950. It also amended the Telecom Regulatory Authority of India (TRAI) Act, 1997. The bill aims to bring changes to the existing regulatory framework of the telecom sector of India and bring in reforms.
Photo Credit: The Economic Times
Enacted in 1885, the Indian Telegraph Act regulated wired and wireless telegraphy, telephones, teletype, radio communications, and digital data communications. It granted the Government of India exclusive authority and privileges for the establishment, maintenance, operation, licensing, and supervision of all forms of wired and wireless communications within the country’s territory. Similarly, the Indian Wireless Telegraphy Act of 1933 regulated the possession and use of wireless telegraphy apparatus in India. It essentially enforced government control over wireless communication within the country. On the same lines, The Telegraph Wires (Unlawful Possession) Act of 1950 controlled unlawful possession of telegraph wires used for communication.
Why are the laws being repealed?
The primary reason for repealing these laws is that they are outdated and do not address modern communication technologies. They did not anticipate the rapid advancements in technology, such as satellite communication and the internet. This made many of their provisions inadequate. These laws weren’t designed for the efficient allocation and management of the limited radio spectrum, crucial for mobile devices and wireless data services. This led to issues like spectrum scarcity and interference, limiting network capacity and service quality. They also lacked provisions for ensuring fair pricing, quality of service, and addressing consumer complaints in a rapidly evolving telecom market. Provisions for the emergence of private players were absent, hindering fair competition and innovation. Their provisions also overlapped and even contradicted, creating confusion at times. Replacing them with a single act would facilitate clear regulations.
Status of India’s Telecom sector
India’s Telecom sector ranks second globally with 1.179 billion subscribers as of August 2023, comprising wireless and wireline users. It is the 4th largest recipient of Foreign Direct Investment (FDI), contributing 6% to total FDI inflow. However, this growth has not been without challenges that have prevented the sector from achieving its highest potential. Complex legal procedures across states & slow approval from multiple agencies delay tower & fibre rollout. Each state in India has its own set of laws and procedures for setting up telecom infrastructure, creating a complex web of red tape to navigate. It can lead to delays in obtaining approvals and starting construction, hindering the rollout of networks and coverage. Even within a single state, multiple government agencies might need to approve different aspects of a tower or fibre installation. This can involve environmental clearances, land acquisition, safety certifications, and so on. Each agency has its own timeline and procedures, meaning approvals can take much longer than necessary, further slowing down the rollout.
Photo Credits: The Hindu
The sector is also facing competition from OTT platforms, hurting the telecom revenue. OTT platforms like Netflix, Amazon Prime Video, and Hotstar consume a significant amount of data traffic, putting pressure on telecom networks. It can lead to congestion and slower internet speeds for users, especially during peak hours. Poor fixed-line coverage & limited fiberization have hindered the 5G rollout. OTT platforms are also heavily investing in creating original content, diverting viewership from traditional TV channels provided by telecom networks and taking up the share of advertisements. Airtel Digital TV, Dish TV, Sun Direct, Tata Play, Videocon D2H are major Direct-to-Home (DTH) providers in India. They operate through satellites and offer subscription packages containing various channels from different broadcasters. This has affected their advertising revenue.
The rapid growth of the sector has also resulted in a massive e-waste problem. Around 95% of this e-waste is disposed of illegally, causing severe harm to the environment. Moreover, the services have not been able to achieve uniform coverage across India as urban areas continue to have higher penetration than rural areas due to high initial costs for service providers.
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A short history of the Telecommunications Bill
There has been a previous attempt made by the government when they introduced the Telecommunication Bill, 2022. However, it could not be passed due to opposition from several stakeholders, including the opposition parties, telecom companies, and civil society groups. According to the bill, OTT communication services were required to acquire telecom licences. Regulating the diverse range of OTT services under a single set of rules was a bit impractical. Imposing a telecom licensing system with penalties against violation could slow down innovation and affect growth of these sectors in the country. Also, in the interest of public safety and to prevent incitement to an offence, the telecommunication networks could be intercepted to disclose any message to the government. This also included service providers like WhatsApp. They would also have to comply, share and decrypt messages as directed. This raised concerns about privacy violations. As a result, the bill was dropped in 2022. Later, an updated version was introduced in Lok Sabha and consequently passed by both the houses.
Key provisions of the Act
- Prior authorisation from the central government will be required for telecom-related activities such as establishing, operating, maintaining, or expanding telecommunications networks, or possessing radio equipment. However, the existing licences will remain valid for the period of their grant. If provided without authorisation, the person can be imprisoned for up to three years, a fine of up to two crore rupees, or both.
- Assignment of Spectrum: Spectrum will either be assigned based on auction or administrative basis, such as in cases of national security, disaster management, weather forecasting, transport, satellite services such as DTH and satellite telephony, and BSNL, MTNL, and public broadcasting services. It also empowers the government to take back the assigned spectrum if it remains unutilised. It also opens avenues for sharing, trading, and leasing of spectrum. However, companies giving back unused spectrum will not receive any compensation from the government.
- This law gives the government (central, state, or special officer) the power to listen to, read, and even stop communications in case of a big emergency, public safety issue, or something significant to the country. It includes phone calls, emails, and even messages on social media. However, news articles and messages sent by journalists to the government are exempted from this interception, except for serious national security reasons. But this requires obtaining a specific order from a designated authority and presenting compelling evidence justifying the potential infringement on press freedom. The law also requires judicial authorities to independently oversee any requests to intercept journalistic communications.
- Companies have an option of a voluntary undertaking mechanism. Under this, they can report any mistakes made by them concerning any minor provision of the act without facing major penalties. But there will also be a structure established for settling disputes that arise out of breach of terms. The company can reach out to an adjudicating officer. If that doesn’t work, there’s a special committee that they can appeal to. Finally, if no resolution occurs at the prior two levels, the dispute will be appealed to the Telecom Disputes Settlement and Appellate Tribunal (TDSAT). This mechanism is designed to encourage companies to be upfront about their mistakes and take ownership of resolving them quickly.
- Satellite Internet Allotments: The law will give satellite internet companies like OneWeb (partnered with Bharti) and Starlink (owned by SpaceX) access to the spectrum if they need to operate.
- The central government has also been given the power to set particular standards and assessments for telecom equipment, infrastructure, networks, and services.
- Apart from repealing the three archaic laws, the central government has also amended the TRAI Act for appointments to the body. Now, an individual having a minimum of 30 years of experience can be appointed as the chairperson and a person having 25 years of professional experience in telecommunication, industry, finance, accountancy, law, or management of consumer affairs as a member. Earlier, the 1997 Act primarily focused on government officials or individuals with extensive telecommunications experience. Individuals outside of government service were not eligible to be a chairperson or a member.
- Now, the OTT services and apps will be removed from the telecommunication services and be covered under the potential Digital India Act under the regulation of The Ministry of Electronics and IT.
- The Universal Service Obligation Fund, established under the 1885 Act to provide telecom services in underserved areas, has been renamed Digital Bharat Nidhi. The fund can be used for research and development.
- Right of Way: Companies that build and maintain internet and phone networks (facility providers) can ask to use someone else’s land or buildings (public or private) to set up their equipment. It includes things like cell towers, cables, and other essential bits and pieces. This right of way should be granted on a non-discriminatory and non-exclusive basis. This has a broader coverage than before as earlier, it only applied to public property. The Act also introduces the concept of facility providers who can lay and maintain telecom infrastructure under agreements with property owners. This expands the entities eligible for right of way beyond traditional telecom companies.
- User protection: The act also contains provisions for safeguarding users, including obtaining prior consent for receiving specific messages like advertisements, establishing Do Not Disturb registers, and instituting a mechanism for users to report malware or designated messages. Mandatory biometric authentication for telecom customers is required to counteract spam calls and messages. Entities offering telecom services must set up an online system for the registration and resolution of grievances.
- An adjudicating officer will be appointed by the government to conduct inquiries into the matter. The officer must be of the rank of Joint Secretary and above.
Implications of the Act
The recently passed Telecommunications Act grants multiple benefits. Increased power to the government to intercept in cases of national security and public safety enhances security. The act has brought stricter regulations for telecommunication service providers, aiming to protect consumers from fraud, spam, and unauthorised access to data. This could include mandatory user verification, stricter data security measures, and penalties for violations. It has also streamlined the licensing regimes, thereby reducing administrative procedures. Replacing the three existing laws of the telecom sector with one has made it easier to understand the complex legislative procedures.
An attempt has also been made to bridge the rural-urban connectivity gap by facilitating the allocation of spectrum for satellite internet providers, potentially leading to increased accessibility and affordability of broadband internet in underserved areas.
While the act brings advantages to the telecom sector, there are also some potential negative consequences attached to it. The increased surveillance powers granted to the government raise concerns about potential violations of individual privacy and freedom of expression. It needs to be made sure that data retention and interception are accompanied by safeguards to prevent misuse of user information. If this power is used arbitrarily, individual freedom as well as freedom of the press can be compromised.
The issue of unclear definitions in the Bill also poses challenges to industry compliance and citizen rights. For example, the Act defines “telecommunication” and “message” broadly, without explicitly excluding internet-based services like OTT (Over-the-Top) platforms. So, it is not clear whether OTT platforms need authorization or not. Concerns have been raised regarding biometric verification as well. Biometric data is sensitive personal data protected by the right to privacy. The Supreme Court has ruled that biometric-based ID requirements for services like SIM cards violate privacy. However, in this act, the provision for biometric verification is mentioned without discussing alternative safeguards.
India’s new Telecommunications Act revamps outdated regulations, aiming to boost growth and address security concerns. However, concerns exist around potential privacy violations and unclear definitions impacting OTT platforms and user data. Striking a balance between security and individual rights, clarifying definitions, and ensuring robust safeguards and transparent implementation will be required. The bill’s success would only be determined by its implementation and what changes it will bring to the telecom sector of the country.