Telecommunications

Telecommunications Bill 2022: an overhaul of the regulatory framework – Telecoms, mobile and cable communications

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Introduction

The Department of Telecommunications (Point) issued the ‘Indian Telecommunications Bill, 2022‘ (Invoice) on September 21, 2022. The bill aims to override three pieces of legislation (i.e. Indian Telegraph Act 1885, Indian Wireless Telegraphy Act 1933 and Indian Telegraph Act 1950 telegraph wires (unlawful possession) Public consultation for the draft law is open until October 20, 2022.

The salient features1 of the bill are as follows:























Licensing continues : The bill proposes to continue to regulate the telecommunications sector through licensing, as is currently the case. It appears that a new set of license terms will be rolled out by the DoT as there is an option given to existing licensees under the bill to either continue with the current license terms for the remaining term of their license, or to migrate to new conditions.


Definition of telecommunications services: In addition to voice, data and Internet, the definition of ‘telecommunications services‘ now includes email, interpersonal communication services, over-the-counter services (OTT) communication and broadcasting services. Notably, since the bill proposes that a license be required to provide ‘telecommunication services‘, this will have wide ramifications, as many other companies providing the services described above are likely to be targeted by the bill.


Infrastructure providers: The registration requirements for suppliers of
telecommunications infrastructure‘ (currently known as ‘IP-I‘ entities) was proposed to continue in the bill. In particular, submarine cables are now part of ‘telecommunications infrastructure‘requiring registration. It is specified in the bill that any casing, coating, tube or pipe surrounding the submarine and any device connected to insulate the submarine cable will also be part of ‘telecommunications infrastructure‘ and therefore require registration, unlike the current regime for IP-I entities. It looks like the DoT may formulate new rules for ‘telecommunications infrastructure‘ as the bill provides the option for existing IP-I entities to continue their current registrations for up to a maximum of 5 years from the date notified by the DoT, after which a mandatory migration to new terms and conditions is prescribed.


Stricter knowledge of the client (KYC) and Caller ID Standards: It is expected that standards relating to KYC and caller ID requirements will be made more stringent under the Bill, as it requires (a) that the Licensee identifies the sender of a message/call through a verifiable mode, and (b) ensure that the identity of anyone sending a message is made available to the person receiving that message/call. Notably, this may have privacy implications, especially for OTT communication service providers. It will be interesting to see how this issue is addressed in new privacy legislation that may be rolling out in the near future.


Authorization to possess ‘wireless equipment’: The bill also proposes that possession of wireless equipment (for example, telecommunications equipment used in wireless communications or wireless transmitters for broadcasting or transmitting wireless communications) will require apermission’ (or an exemption therefrom). With limited information on this aspect and a broad definition of wireless equipment, it will be important to gain clarity regarding authorization requirements.


Spectrum management: The bill states that the allocation of spectrum can be done either by ‘administrative process‘ (i.e. disposal without auction) or auction (through a bidding process). It is important to note that any spectrum already assigned through an administrative process will only be valid for 5 years from the date notified by the DoT or the expiration date of that assignment, whichever comes first. For efficient use of the spectrum, the DoT has the right to reallocate (i.e. reallocate to a different use) or harmonize (i.e. rearrange) any frequency range subject payment of fees/charges by the DoT. In addition, the DoT may establish a monitoring mechanism to track compliance with spectrum usage conditions. Spectrum sharing, leasing and trading have been recognized under the bill.


Voluntary commitments: The bill introduced a new concept of ‘voluntary commitments‘. To this end, the licensee or registered entity has the option of voluntarily disclosing any violation of the license or registration conditions by agreeing that specific measures will be taken by this entity. Once the voluntary undertaking is accepted by the DoT, it prohibits any action against that entity.


Right of way
(Line): A telecommunications infrastructure provider/licensee has the right to obtain right of way over the public domain. For the right of way relative to private property, if the telecommunications infrastructure provider/licensee fails to achieve the requested right of way, the DoT has the right to acquire that right of way to maintain the telecommunications infrastructure after following the proper procedure.


Restructuring / insolvency: Existing guidelines on mergers and acquisitions that require multiple DoT clearances have now proposed to be simplified under the bill with the requirement to provide DoT notice for any merger/acquisition/demerger. Additionally, while insolvency proceedings are pending, licensees are permitted to operate as long as the licensee is able to continue to provide telecommunications services using the assigned spectrum and does not default on any payments. under the license and comply with the modified terms prescribed by the DoT. If the licensee fails to comply with the above conditions, the spectrum assigned to that licensee will revert to the DoT. After review, the licensee may be permitted to continue using the spectrum subject to compliance with prescribed conditions.


Offenses and Penalties: Under the bill, offenses and penalties were classified as ‘knowable’ and ‘not recognizable‘ and the composition of certain offenses is also prescribed. The gradation of penalties for violation of the terms of the license is also prescribed according to certain parameters. This will ensure that excessive penalties are not imposed and that a reasonable assessment is made before imposing them.

Comment

The publication of the bill offers hope for a transformation of the telecommunications regulatory space. Through the ongoing consultation process, various stakeholders will have the opportunity to voice their concerns and share their suggestions. This process will likely culminate in a holistic law that will govern telecommunications in India.

The bill introduces forward-looking concepts such as regulatory sandboxing, compounding offenses and voluntary commitments. Also, the bill stipulates the protection of users against certain messages relating to advertising and the promotion of goods/services. The DoT is empowered to take certain steps to protect users, including ensuring consent is obtained, preparing ‘Do not disturb‘ Logs and enforcement mechanism to report those messages that are in violation. It will be interesting to watch how the provisions relating to such messages in the Bill will interact with the Telecommunications Regulatory Authority of India’s Customer Preferences in Commercial Communications Regulations 2018, which cover the same subject. In addition, to avoid any overlap between the Information Technology Act 2000 and the OTT Regulation Bill, care should be taken. The introduction of certain provisions, such as the protection of the DoT and its agents against actions taken in good faith, will ensure prompt decision-making and should contribute to the growth of the telecommunications ecosystem in the long term.

Footnote

1. Please note that this is only a highlight of the bill and does not cover all the provisions of the bill.

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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