Telecommunications

Proposed New Legal Framework for India’s Telecom Sector – Responding to the Need of the Hour – Telecoms, Mobile and Cable Communications

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INTRODUCTION

India, the second largest telecom market in the world, has 117 million telecom subscribers. Telecommunications is an enabler of digital governance, which emphasizes the data-driven and people-centric provision of goods and services. COVID-19 has underscored the criticality of telecommunications, which has become the lifeline of the economy, keeping people connected. Universal, resilient, secure, accessible and affordable telecommunications are a prerequisite for an inclusive India striving to achieve “antyodaya” – the upliftment of all.

Amid the emergence of new technologies like 5G, Internet of Things, Artificial Intelligence, etc. offering opportunities to transform millions of lives, the Department of Telecommunications (“DoT”) released a consultation paper on July 23, 2022 on the need for a new legal framework. framework governing telecommunications in India (“Framework”), to deal with the realities of the 21st century and stakeholders are required to provide feedback on the proposed framework by August 25, 2022.

REASONING

As technology has undergone a colossal change since the Indian Telegraph Act 1885, the Indian Wireless Telegraphy Act 1933 and the Telegraph Wires (Unlawful Possession) Act 1950, a new law for the telecommunications sector is undoubtedly long overdue. . The framework describes a significant overhaul of the existing legal framework governing the telecommunications sector in India, focusing on the consolidation of existing laws and a review of global best practices.

OVERVIEW OF GUIDING PRINCIPLES

The proposed framework outlines overall policy changes beneficial to the development of the telecommunications sector, which are summarized below:

  • Simplification of the regulatory framework:
    • ensure regulatory certainty and promote investment, while retaining exclusive government privileges for the provision of telecommunications services, establishment and maintenance of the telecommunications network and infrastructure;

    • no retroactive modification to the detriment of an entity. ; and or

    • promote investments and a framework for the different actors in the telecommunications value chain such as service providers, infrastructure providers, right of way (“RoW”) providers, etc.


  • Spectrum management: Spectrum, being a scarce natural resource, must be used in the public interest to serve the nation.
    • Spectrum allocation – At present, allocation is done through a combination of policy and court orders. Going forward, the framework aims to facilitate regulatory clarity of allocation, serve the common good, and enable widespread access to telecommunications services;

    • Spectrum use – be liberalized in a technology-neutral manner, allowing a spectrum assignee to deploy new technologies and maintain continuity of existing policy, while ensuring flexibility for central government to use spectrum in the public interest ; and

    • Use of frequency range– include provisions for the rearrangement and harmonization of the frequency range, while the central government may authorize spectrum sharing, exchange, rental and return of allocated spectrum, subject to prescribed conditions, including the payment of royalties.


  • Line: is a precondition to allow the expansion of the telecommunication network and the improvement of telecommunication services. The right-of-way framework should operate in a uniform and non-discriminatory manner with an effective dispute resolution mechanism, to ensure integrated infrastructure development by establishing common conduits and cable corridors in infrastructure projects.

  • Mergers & Acquisitions: Simplification of the existing process for mergers, divisions and acquisitions, or other forms of restructuring to ensure that the licensee or registered entity complies with the restructuring plan under the Companies Act 2013 and simply notify the DoT, if necessary.

  • Insolvency: The impact of insolvency in the sector should be kept to a minimum, so that insolvency proceedings do not lead to the suspension or termination of the licence/authorization/assignment to the extent:a
    • telecommunications services continue to be provided; and

    • there is no failure to pay fees for the use of the telecommunications license or the spectrum.
      Therefore, a balance between continuity of service and safeguarding public interests must be maintained.


  • Reorganize the Universal Service Obligation Fund with the Telecommunications Development Fund, to ensure the provision of telecommunications services to underserved rural and urban areas, increased research and development of new technologies, and promotion employment and training activities. This will give impetus to the growth of local technology companies.

  • Sanctions to be imposed in proportion to the infringements.

  • Standards for Responding to Public Emergencies, National Safety and Security: To enable the central government to prescribe standards for telecommunications equipment, services, networks and infrastructure, aimed at public safety, in view of its widespread use, for education, entertainment, telemedicine or the facilitation of e- ask.

COMMENTS

Telecommunications have the potential to trigger and accelerate India’s socio-economic transformation, contributing to the realization of an ‘Aatma Nirbhar Bharat’. While overhauling and evolving existing telecommunications law is a laudable step, to keep pace with advances in emerging technologies, a few things should be kept in mind:

  • the existing telecom framework is extremely dissected and therefore every aspect may not require consolidation (eg spectrum management). Consolidation should be carefully assessed and done with caution, only if necessary.

  • the interaction of laws such as the Companies Act 2013 and insolvency laws will need to be harmonized within the framework.

The new advisory document, designed to enable a future-ready framework deployed in the context of new era technologies, aims to benefit citizens, by providing clarity, precision, regulatory certainty, responsive to changing realities and enabling the sector telecommunications to realize its potential with minimal policy disruption.

The contents of this document do not necessarily reflect the views/positions of Khaitan & Co but remain solely those of the authors. For any other questions or follow-up, please contact Khaitan & Co at [email protected]

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