Opinion | Telecommunications Bill 2023: A Better Version of Draft Telecom Bill 2022?

Amid heightened parliamentary noise, the Union Minister of Telecommunication introduced the Telecommunications Bill, 2023 (Telecom Bill, 2023) into the Lok Sabha on December 18, 2023. Within two days, the lower house passed the bill. Ideally, this law which seeks to replace three existing laws — the Indian Telegraph Act, 1885; the Indian Wireless Telegraphy Act, 1933 and the Telegraph Wire (Unlawful Possession) Act, 1950 deserved to be referred to a Parliamentary Committee for legislative scrutiny. It is highly unlikely that the bill will be referred to any committee given it is headed to the upper house.

Tangibly, the process of overhauling the Indian telecom framework started in 2022, when the Department of Telecommunication (DoT) floated a consultation paper which was immediately followed by a draft telecom bill (Telecom Bill, 2022). The earlier version of the telecom bill created a lot of pushback from the industry, especially for including Over the Top Services (OTTs) as part of telecommunication services.

Opposed to a good rule-making process, the stakeholders’ feedback on the Telecom Bill 2022 was never made public. Interestingly, unlike the Digital Data Protection Bill (before it was enacted), Broadcasting Regulation Bill and the Digital India Bill, no version of the Telecom Bill was circulated over WhatsApp and straightway made its way to the Parliament.

Before comparing the latest version with the 2022 Bill, let’s look at the salient features of the Telecom Bill 2023:

• The term ‘telecommunication’ has been defined for the first time, because the existing laws i.e., Telegraph Act, 1885 uses the term ‘telegraph’. Given so many decades have passed and how telecom technology has evolved, it was high time to adopt a modern definition which recognises these technical developments.
• The bill provides a framework for authorisation of telecommunication services, telecommunication networks, and possession of radio equipment. Further, the rules will spell out the terms and conditions of authorisation (like license or registration) depending on different types of telecom services or network operated (Clause 3). Under the Telegraph Act, 1885, the government had exclusive privilege to operate, maintain and work telegraphs and the power to issue “license” for carrying out these activities.

The Telecom Bill moves away from the expression “government’s exclusive privilege”, and, for the first time, the primary law recognises “authorisation” as a mode of operation against the default “licensing route” in the Telegraph Act. While authorisation could also mean license, but still, this positions the government to adapt more effectively to evolving circumstances in the telecom sector. In other words, we can expect obligations to be contextualised (variation in terms and conditions of authorisations) based on the nature of the activity and the level of risk.

• It imposes an obligation on telecom providers to identify the person to whom it provides services through any verifiable biometric-based identification (Clause 3). Subscriber verification is an existing obligation for telecom service providers (under the licensing agreement), and later in 2019, the Telegraph Act was amended to introduce Aadhaar-based KYC verification (voluntary use) of subscribers.
• For the first time, the assignment of spectrum has been incorporated into a legislative framework which is expected to bring more certainty for regulated entities. For instance, the bill provides a list of activities (Schedule I) for which spectrum shall be allocated through administrative process (Clause 4).[i]
• Right of way in public property has remained a major challenge, like, getting permission to install towers, lay cables, etc, in the expansion of telecom networks. The bill for the first time lays down a statutory framework to expedite the process of obtaining the right of way (Clause 10-18). This could help the telecom industry to expand the telecom network/infrastructure, especially to proliferate 5G which requires a greater number of cell towers. A robust telecom network can have a positive impact on the overall ecosystem, like meeting the demand for increased bandwidth/throughput, reduction in latency, better consumer experience over OTTs, spur in edge computing devices, IOTs, etc.
• The bill authorises the government to lay standards for various matters with respect to telecommunication services, like, identifiers, encryption and data processing, and cyber security (Clause 19).
• The existing Universal Obligation Fund has been renamed as Digital Bharat Nidhi and the end-use application of the said fund has been clearly laid out (Clause 24 & 25).
• Given the rise of emerging technologies in telecommunication, the bill sets out a framework for regulatory sandbox and allows the assignment of spectrum through an administrative process for sandboxing any new technology (Clause 27).

Revisions made to Telecom Bill, 2023

Despite side-stepping set norms of rulemaking, the revised version i.e., Telecom Bill 2023 proposes to introduce some positive changes, or we may call them as corrections made to the previous version. These changes are highlighted below:

Limited scope of ‘telecommunication services’

The definition of ‘telecommunication services’ in the 2022 Bill meant service of any description (including broadcasting services, electronic mail, voice mail, voice, video and data communication services, audiotex services, videotex services, fixed and mobile services, internet and broadband services, satellite-based communication services, internet-based communication services, in-flight and maritime connectivity services, interpersonal communications services, machine to machine communication services, OTT communication services) which is made available to users by telecommunication, and includes any other service that the Central government may notify to be telecommunication services.

The phrase used in the above definition is “service of any description which is made available to users by telecommunication.” This formulation made the definition too expansive and could have included literally all application services provided to users by telecommunication. The 2022 definition did not consider that a layered approach to application services being provided like OTTs using telecommunication networks should not be construed as telecommunication services.

Additionally, the 2022 definition included a variety of services within its scope, like OTTs, machine-to-machine communication services, email services, broadcasting services, etc.

Another problem was that in the 2022 draft, the definition of a telecom service could have been expanded via notification by the executive i.e., without legislative amendments. This was a grave concern as fundamental changes like altering the definition clause in a law should not sidestep the rigours of parliamentary approval.

Changes in 2023 Bill

Revised definition – Telecommunication service means any service for telecommunication.

The definition of telecommunication services has been recast as: first, it means any service ‘for telecommunication’, second, it removes the inclusive list of services; and third, the scope of telecommunication cannot be altered merely through a government notification. The revised definition also excludes broadcasting and instead references the Cable Television Networks Act for regulatory guidance, thereby, Bill 2023 creates a clear distinction between the telecom and broadcasting sector.

However, some are apprehensive that the term ‘message’ [Clause 2(g)] has been defined in such an expansive way (like, it includes text, image, sound, video, data stream, and information sent through telecommunication), and since the definition of telecommunication includes message, in other words, it could include OTTs.

No more exclusive privilege of the Centre

As per best global practices, the exclusive privilege is limited to spectrum assignment because it is a scarce public resource and is considered as a wealth of the sovereign. For instance, both the International Telecommunication Union and the World Trade Organisation recognise the sovereign right of countries only over spectrum assignment to avoid harmful interference between radio stations of different countries. The language in the 2022 Bill, however, sets up an exclusive privilege of the government to provide a full range of services; establish, manage, and operate networks and equipment that make up the internet. The need for this all-encompassing right was not obvious.

Changes in 2023 Bill

The expression that “the central shall have the exclusive privilege….” has been deleted which indicates a strategic move towards a more flexible and scalable regulatory framework. Rather, Telecom Bill 2023 uses the term “authorisation” (and not licenses, used in the 2022 Bill) for three types of activities, namely, telecommunication services, establish, operate, or expand telecommunication network and possess radio equipment.

While authorisation could mean licenses, the term authorisation allows flexibility where the nature of obligations (to be specified through rules) shall differ on the nature of telecommunication services, telecommunication networks or radio equipment. Given the fast-changing technology in the telecommunication world, this regulatory approach is progressive and flexible to align the regulatory structure with the changes.

Liberalised spectrum allocation through administrative process

Under the Telecom Bill, 2022, spectrum assignment for the purposes listed in Schedule 1, like for radio backhaul operations, was limited only to governmental functions or purposes in view of public interest. This created uncertainty about whether it precluded private entities from obtaining spectrum on an administrative basis. Hence, a clarification was expected that allocation through administrative processes should not exclude private operators.

Changes in 2023 Bill

• The Telecom Bill 2023 explicitly states that spectrum allocation for telecommunication shall be through auction, whereas for purposes listed in Schedule I, it shall be done only through administrative process. Earlier, such administrative allocation was discretionary. This is expected to spur better spectrum utilisation (like V & E Band for backhaul telecommunication connectivity) and wider participation of stakeholders.
• Further, the Telecom Bill, 2023 has expanded the scope of administrative allocation by removing the expression “spectrum assignment for governmental functions or purposes in view of public interest”. This can enable the participation of private entities in operations like backhaul for commercial purposes who could help decongest mobile broadband by increasing the currently low density of commercial WiFi hotspots in India.
• The Telecom Bill, 2023 has expanded the scope of Schedule 1 to include Global Mobile Personal Communication by Satellite (GMPSC) licenses, as outlined in Section 4(4) of the 2023 bill. This expansion is particularly noteworthy for the satellite broadband services sector. Previously, the DoT had requested the TRAI to establish terms for auctioning spectrum for satellite services.
• The Bill 2023 allows the assignment of spectrum through the administrative process for creation of one or more regulatory sandbox (Schedule I, item 19). While the earlier draft allowed administrative allocation for enabling new technologies, the Telecom Bill 2023 explicitly mentions regulatory sandbox as a ground for such allocation. This is expected to bring more certainty and promote the ecosystem of regulatory sandboxes around new and emerging technologies.

Recommendatory powers of TRAI have been retained

The TRAI Act [section 11(1)(a) of the TRAI Act, 1997] requires the Central government to seek recommendations from TRAI on certain matters. Earlier version of the Telecom Bill removed this mechanism. Given how TRAI has effectively recommended the development of the telecom market as an independent regulator, this power of the TRAI should not have been diluted. In the 2023 version, the recommendatory powers of the TRAI have been restored.

Participation of private sector in TRAI

Interestingly, the 2023 Bill allows the appointment of a person from the private sector/industry in the role of Chairperson or member of the TRAI, provided such person has at least 25 or 30 years of experience respectively, in the relevant field and has served on the board of directors or as chief executive of a company. This is a welcome change and could open avenues for better and more meaningful representation of the industry in framing policies for the telecommunication market.

Some important deletions from the Bill, 2023

No refund of fees on surrender of license, registration, etc

The Telecom Bill, 2022 gave powers to the Central government to refund fees in the event license, registration, authorisation, or assignment granted by the government was surrendered. However, the revised version has removed such discretionary powers. This means once telecom entities acquire spectrum through the auction process, they will not have the option to recoup their expenses by surrendering it prematurely. This also implies that all dues, including those that are deferred and payable in yearly instalments, remain the responsibility of the operators.

No insolvency framework & no respite for default of payments

Unlike the 2022 version which had a dedicated Chapter 5 on restructuring, defaults in payment and insolvency, the revised version has dropped the entire chapter. Like, it laid down clear provisions on the spectrum reverting to the Centre in the event of insolvency of the service provider and failing to meet certain conditions. Further, it allowed the government to take several measures, like deferring the payment of license fees in the event of defaults or relief from payment, after considering several factors, like the financial stress of the telecom entity or consumer interest.

The 2023 version of the Bill provides no such flexibility to the government and marks a significant departure from the earlier approach where the government seemed inclined to provide a safety net for telecom operators facing financial difficulties.

Important miss

Telecommunication Bill, 2023 intends to modernise the telecom regulatory framework in India. One of the cardinal principles of the democratic and modern rule-making process is transparent and recurring public consultation. Following the recent trend as seen in other, for instance, the Digital Personal Data Protection Act, 2023 (as may be prescribed appears at least 26 times) or the Broadcasting Services (Regulations) Bill, 2023 (as may be prescribed appears approximately more than 60 times), the Telecom Bill reserves lot of critical details to be decided/prescribed through rules.

While this is a logical approach given the flexibility required to keep the substantive law tech neutral, the bill fails to state a statutory obligation on the Central government to hold public consultation for rule-making exercises.

The power to make rules should have included requirements for prior publication and a public consultation process, within minimum timeframes to solicit comments, following the TRAI process. It should also require the release of a final publicly available report on decisions taken after consultations are closed. These should apply to the making of rules for authorisation conditions, spectrum management, laying of standards, like for encryption, etc.

While the Telecom Bill 2023 could have addressed the ambiguity around the regulation of OTTs in a better manner, it scores well on counts like acknowledging authorisation as a broad approach of regulation and expanding the scope of spectrum assignment through administrative process.

[i] Schedule I can be amended through a notification which shall be laid before the Parliament. This requirement was not present in the 2022 Bill.

The writer is a public policy consultant. Views expressed in the above piece are personal and solely that of the author. They do not necessarily reflect News18’s views.