Dr Mahesh Uppal, Director, ComFirst India

The Draft Indian Telecommunication Bill, 2022 was released for consultation last September. The bill seeks to conso­li­date all telecommunication legislation in India into an updated and easy-to-read doc­u­ment. It would replace three separate pie­ces of legislation – the Indian Telegraph Act, 1885; the Indian Wireless Telegraphy Act, 1933; and the Telegraph Wires (Unl­aw­ful Possession) Act, 1950. The acts date from a period when telephony was the main service and the government its mono­poly provider, and regulatory bodies such as the Telecom Regulatory Authority of India (TRAI) were absent. Services such as mobi­le communications and the internet, which are ubiquitous today, did not exist. A more modern framework is eminently desirable. Sadly, the draft bill misses the opportunity and could set us back instead. It deserves to be comprehensively reviewed in the revised draft promised by the government.

At the risk of appearing negative, I will fo­cus on the problems with the current ap­p­­roach, and the risks they pose. It retains – nay, strengthens – a command and control approach, which was the key problem with the “colonial” Indian Telegraph Act of 1885. The draft bill reinforces and even ex­pands the government’s role in licensing by moving to a generic definition of telecom services that include virtually any tra­nsmission of data, text, voice and video. The bill is agnostic to whether the “servi­ce” involves deploying a physical network (carriage), or the hundreds of popular over-the-top (OTT) internet applications such as email, WhatsApp and Zoom, whi­ch run on the underlying network. If the draft bill becomes law, all “telecom service” providers will need a licence.

The new provisions will substantially in­­c­­rea­se the regulatory costs and complia­n­ce requirements for providers of OTT services. This will deter existing and future pl­ay­ers and innovators. The draft bill’s ap­proach differs from the very countries highlighted in the explanatory note accompanying it. Virtually all of those countries have abandoned licences for all services except those that need exclusive access to scarce sp­­ectrum or numbering resources. They lar­gely restrict regulation to telcos like Airtel and Jio that provide carriage services. Far from requiring a licence, OTT players, typically, do not even need prior permission to deploy their services. The reasons make sense. Unlike carriage services, OTT applications are cheap and easy to deploy and replicate. Competing players face virtually no barrier to entry. It is, therefore, illogical to equate carriage services and OTT apps sim­ply because of some common features such as messaging and telephony. The very existence of OTTs depends on the telcos, and not vice versa. The two are clearly not peers. Indeed, it is counterintuitive to ex­pand the scope of licensing at a time when India’s peers are shrinking it.

Taking a similar unorthodox approach to a key resource, the draft bill mandates that spectrum for commercial use be alloca­ted through auctions. Auctions are admittedly a transparent method of price discovery, but not the only one. The Supreme Court too recognised this while clarifying its earlier order mandating auctions. For ex­ample, it is no less transparent – and ar­guably more efficient – to allow shared use of spectrum where possible. The draft bill proposes auctions in instances where spectrum is shareable, such as satellite spectr­um. The global practice is to allocate such spectrum administratively. Auctioning it will raise the cost of satellite communications, which remain the only option to con­n­ect many rural and remote areas where de­ploying conventional terrestrial mobile services is prohibitively difficult and expensive. Similarly, mandatory auctions will also foreclose the deployment of services such as Wi-Fi 6E and WiGig, which run on shared spectrum. Almost all major jurisdictions are delicensing spectrum to facilitate these powerful services. The draft bill will further delay the deployment of several important wireless services, which are widely available in major countries but not yet in India. An­ot­her concern is the removal of key provisions in the TRAI Act related to market en­try and exit. The draft bill will no longer re­quire the government to consult TRAI on decisions relating to licensing. This is es­pecially worrying because post the new telecom policy in 1999, the TRAI Act was esp­ecially amended in 2000 to assure private investors that such decisions would be scrutinised by TRAI, even if the latter’s recommendations are not binding. The draft bill allows the government to make unilateral de­cisions once again and is, therefore, a step backward.

There is no denying that the draft bill contains several government measures to ease the pain of telcos. Its efforts to further si­mplify spectrum trading and leasing de­serve credit. So do the many provisions to make it easier to obtain right of way to de­p­loy public infrastructure such as towers and optical fibre. The government has also un­dertaken an unprecedentedly wide con­s­u­l­tation for the draft bill. The telecom minister’s approach raises hopes that the revised version will remove the anomalies in the current draft and move away from command and control. The draft bill must, instead, facilitate an environment that en­courages investment and promotes competition at all levels – between players, technologies and bu­siness models. This will ensure that consumers enjoy diverse services at competitive prices.