Under the Telecommunications Act 2023, the government has notified (on 21 June 2024) the draft right of way (RoW) rules, which aims to ease the regulatory requirements for establishing a telecommunication network.
History of Telecommunications in India
Historical Framework (1885-2023): The Indian telecom sector has evolved significantly, influenced by three key laws: The Indian Telegraph Act of 1885, The Indian Wireless Telegraphy Act of 1933, and The Telegraph Wires (Unlawful Possession) Act of 1950.
The latter, which addressed the illegal possession of telegraph wires, was recently repealed by the Repealing and Amending Act of 2023, highlighting the sector’s regulatory adaptability.
Regulatory Authorities: The Telecom Regulatory Authority of India (TRAI) Act of 1997 played a crucial role in tariff regulation and led to the establishment of both the TRAI and the Telecom Disputes Settlement and Appellate Tribunal (TDSAT). Despite these developments, the central government retains the authority for licensing.
1885 Act and Technological Evolution: Initially designed to govern telegram services, the Indian Telegraph Act of 1885 has proven remarkably resilient. It remained in effect even after the cessation of the telegraph era in 2013. As technology progressed to include real-time transmission of text, voice, images, and video, this 1885 Act continued to regulate modern telecom services.
About Telecommunications Act, 2023
As per the Telecom Regulatory Authority of India (TRAI), India is the second-largest telecommunications market globally, with a teledensity of 85.11% as of July 2022.
The nation’s growing internet and broadband penetration bolsters the Digital India initiative and marks its entry into the 5G era.
In December 2023, the much-awaited Telecommunication Act 2023 was enacted, focusing on establishing a robust security framework to safeguard critical mobile networks against cyber threats and unauthorized access.
The objective of the Telecommunications Act, 2023:
The Act seeks to thoroughly revise telecommunications legislation, integrating different elements of telecom regulation such as spectrum management, right of way, dispute resolution, and other administrative processes into one unified statute.
It formalizes the National Frequency Allocation Plan into law, stipulates the allocation of spectrum, and sets up procedures for interception and search in specific instances, along with penalties for non-compliance.
Key Features of the Telecommunications Act, 2023
Authorization for Telecom Activities:
Prior approval from the central government is necessary to:
Provide telecommunication services.
Establish, operate, maintain, or expand telecom networks.
Possess radio equipment.
Provisions for Existing Licenses: Current licenses remain valid for their granted duration or five years if unspecified.
Spectrum Assignment: Spectrum will generally be assigned via auction, except for specific uses such as national security and disaster management, where it will be assigned administratively.
Repurposing and Reassignment: The central government can repurpose or reassign any frequency range.
Spectrum Leasing: The government may permit the sharing, trading, leasing, and surrendering of spectrum.
Interception and Search Powers: Interception and search actions must be necessary for public safety or emergencies. Authorized officers can search premises for unauthorized telecom equipment.
User Protection: The central government can implement measures to protect users, including:
Obtaining prior consent for specific messages, like advertisements.
Establishing Do Not Disturb registers.
Creating mechanisms for reporting malware or specific messages.
Grievance Redressal: Telecom service providers must have an online system for registering and addressing grievances.
Right of Way: Entities installing telecom infrastructure can request the right of way over public or private property, which should be granted on a non-discriminatory and non-exclusive basis where possible.
TRAI Membership Qualifications: The Act amends the TRAI Act to allow individuals with at least 30 years of professional experience to serve as Chairperson and those with at least 25 years of experience to serve as members.
Renaming of Fund: The Universal Service Obligation Fund is renamed Digital Bharat Nidhi and can be used for telecom research and development.
Offences and Penalties: Unauthorized telecom services provision or network/data access can lead to imprisonment, fines, or both.
Breaching authorization terms is subject to civil penalties.
Possessing unauthorized equipment or using unauthorized networks/services is penalized.
Adjudication Process: The central government can appoint an adjudicating officer to conduct inquiries and issue orders for civil offences under the Act.
Issues Associated with the Telecommunications Act, 2023
Amplification of Oligopoly: The spectrum allocation method, particularly administrative allocation as specified in the Act, may worsen the existing oligopoly in the telecommunications sector.
Interception of Communication: The Act permits interception and monitoring, but critics have raised concerns about the procedures and safeguards, which are managed by the government.
Colonial Oversight Mechanism: The Act proposes continuing the interception procedures outlined in the Indian Telegraph Act of 1885. Given that citizens are now sovereign, the relevance of this colonial-era oversight mechanism is questionable.
Mass Surveillance: The Act’s provision allowing the interception of any message or class of messages has sparked concerns about potential mass surveillance.
Search and Seizure Powers: Authorized officers are granted search and seizure powers by the Act without clear procedural safeguards, raising fears of potential misuse.
Biometric Verification: Telecom service providers are required to verify users’ identities through biometric-based identification, which has raised concerns about potential infringements on the fundamental right to privacy.
Delegation of Regulatory Functions: The central government is responsible for authorizations and spectrum assignment. This delegation of regulatory functions, not specified under the law, could give the executive excessive power to restrict business freedom.
Offences and Penalties: The Act permits the central government to amend the schedule of civil offenses and penalties through notifications. This raises questions about the appropriateness of modifying offenses through notifications instead of parliamentary acts.
Legal Limit on SIM Cards: The Act introduces penalties for using SIM cards beyond a notified limit, prompting debates on whether there should be a legal limit on the number of SIM cards an individual can use.
Are OTTs covered under the Act?
According to Section 3 of the Telecom Act, anyone who wants to provide telecommunication services; establish, operate, maintain, or expand a telecommunication network; or possess radio equipment must obtain authorization from the government.
The government’s rules of business clarify that telecom services, which involve carriage, fall under the Department of Telecommunications. Apps are under the Ministry of Electronics and IT, and content is overseen by the Ministry of Information and Broadcasting, which covers most OTT regulations.
Fintech is regulated by the Finance Ministry, and e-commerce apps are under the Ministry of Commerce and Industry.
Therefore, Over-The-Top services (OTTs) will not be regulated by the Telecom Act, as that act falls under the domain of the Department of Telecommunications.
The Telecommunications Act 2023 is significant for several reasons:
Replaces Archaic Laws: It aims to replace outdated colonial-era laws like the Indian Telegraph Act (1885), the Wireless Telegraphy Act (1933), and the Telegraph Wires (Unlawful Possession) Act (1950). These reforms are necessary due to the significant changes in the telecom sector in recent years.
Clarity for Satellite Broadband Services: The Bill clarifies regulations for satellite broadband, an emerging telecom field expected to improve connectivity in remote areas. It aligns India with international norms, encouraging global players to enter the market, fostering innovation, creating opportunities for startups, and strengthening India’s position in the global satellite market.
Reduces Executive Discretion: The Bill limits the assignment of spectrum to auctions or administrative processes, removing the vague “any other manner” provision from an earlier draft.
Technology-Based Governance Solutions: It introduces online dispute resolution for grievance redressal, facilitating ease of doing business.
Simplifies Bureaucratic Procedures: The Bill simplifies the process for obtaining telecom licences and permits, consolidating over 100 types of authorizations into a single process. This will provide regulatory stability and an enabling environment for telecom expansion.
Excludes OTT Services: The Bill does not extend its reach to telecom-adjacent services like OTT, preventing overregulation of the sector.
Here are the challenges highlighted in the Telecommunications Bill 2023:
Concerns about Executive Power Misuse: There are worries that the bill’s expansive provisions could allow the government to take control of, manage, or suspend telecom services or networks in the name of national security or during wartime. Additionally, there’s apprehension about clauses permitting message interception and service suspension in emergencies or for public safety.
Privacy and Surveillance Issues: Another contentious clause allows the government to set standards and enforce compliance for encryption and data processing in telecom. This raises concerns about potential government interference with popular chat apps’ encryption, infringing on users’ privacy rights.
Legal Uncertainty over Administrative Allocation: The bill’s provision for administrative allocation of telecom resources contrasts with the Supreme Court’s 2012 ruling favouring auctions for scarce natural resources like the 2G spectrum, potentially leading to legal challenges.
Ambiguity in Definitions: Definitions of terms like telecom, telecom services, and what constitutes a message are overly broad, potentially enabling wide-ranging interpretations. Critics argue that this could pave the way for the regulation of online platforms, including messaging apps like WhatsApp and OTT platforms.
Way forward:
Regulatory Solution of Functional Separation: The legislation should adopt the concept of functional separation, akin to international regulations, to tackle market dominance. Instances from Sweden, UK, Australia, Ireland, and Poland demonstrate its application, but caution is needed to avoid overly burdensome measures that could stifle investment and innovation.
Encouraging Industry Transitions: Incentivized voluntary shifts, such as those observed in Italy through reduced taxes or fiscal advantages, offer a more effective strategy. Anticipated outcomes encompass a range of industry setups, from fully integrated telecom companies to network aggregators and specialized service providers.
Shift to Wireline-Centric Architecture: A wireline-focused architecture is better equipped to deliver 5G/6G speeds. India should pivot from wireless to wireline-centric infrastructure to support advanced digital applications. The legislation’s focus on Right of Way acknowledges this necessity, advocating for a conducive business climate to reduce expenses, particularly in expanding fibre networks across urban and rural areas.
Government Role and Financial Generation: The government, via the USOF, ought to establish clear targets for rural and non-rural infrastructure development. Generating resources and fostering a competitive environment for private sector investment is crucial for building robust fibre networks.
Unified Strategic Direction: The legislation concludes by underscoring the importance of a unified strategy, emphasizing coherence in licensing, standards, skills development, and governance across various departments. This comprehensive approach is essential for India’s digital transformation, positioning the telecom sector as a leader in sustained growth.
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