Dr Mahesh Uppal, Director, ComFirst India
The Telecommunications Act, 2023, passed by Parliament on December 20, 2023, is an important milestone. The new legislation replaces both the Indian Telegraph Act, 1885 and the Indian Wireless Telegraphy Act, 1933. The updated law is more compact and clearer. Ironically, that makes it both good and bad.
The need for more modern legislation for the telecom sector is evident. The repealed laws were enacted at a time that is barely recognisable today: the fixed telephone was virtually the only telecommunication service available (to a select few), and the government was its sole provider. The now ubiquitous mobile phone, internet, social media, etc. were nowhere on the horizon, nor were private participation, competition, or regulation. Admittedly, the old laws did not block these developments later. However, retrofitting them to a sector encompassing diverse functions, services, technologies and players has been complex and controversial, with disputes often reaching the Supreme Court.
The act does “settle” some contentious issues that divided the industry. One was the distinction between the telecom network and the content and application services it supports – the so-called over-the-top (OTT) services. The earlier draft contained an all-encompassing definition of telecommunication services, which extended to OTT content and applications. That raised the spectre of OTT players requiring a licence or authorisation to operate like network players. The act removes the explicit reference to OTT services, though some confusion remains.
The act also settles issues dogging the allocation of spectrum. Earlier decisions by the government and courts – including the Supreme Court – arguably solved immediate problems but created new controversies. Examples include the decision to allocate spectrum based on criteria such as subscriber numbers, so-called “first come, first served”, or auctions, as mandated by the Supreme Court in its verdict on the “2G-Scam”.
These were all inadequate. They failed to fully anticipate the diverse scenarios of spectrum use for telecommunications, including access, backhaul and satellite. The earlier draft raised the prospect of auctioning satellite spectrum, an approach considered inappropriate and inefficient, given that satellite players do not need spectrum for exclusive use. The new act rightly allows for a more nuanced approach based on the specifics of the technology and usage, allowing for different methods of allocation based on the intended use of the spectrum.
However, the act may not be future-proof despite claims to the contrary. It lacks a clear statement of its mission and approach. It substitutes the daunting concept of “licensing” for the “softer” one of “authorisation”. However, it is unclear what specifically will change beyond the terminology. For instance, how much easier, simpler, cheaper or faster will authorisation be than licensing? Similarly, how do we understand the clarification by the minister of communications, after the passage of the act, that it does not apply to OTTs when the act’s definition of telecommunication does not exclude them?
It has been suggested that the proposed Digital India Act will provide the regulatory framework for internet and OTTs in the country. How, then, do we understand the scope of the act’s provisions related to standards encryption, customer identification (KYC), user protection, etc.?
The underlying telecom network and the internet support audio and video calling, and messaging services. The act seems not to distinguish between the methods of providing the same service. Where does that leave us between the roles envisaged for the act and the imminent Digital India Act? While expecting a definitive resolution may be unrealistic, it is reasonable to expect an ambitious act to provide guidance on issues already causing widespread confusion and concern.
Given the continually evolving nature of digital communications, the act would have benefited by focusing on a statement of intent and broad principles, leaving room for course correction. It could have left more issues to be addressed by an independent sector regulator based on the realities of technologies, markets and consumer concerns. This would have provided better judicial safeguards against potential abuse of its provisions, for instance surveillance, shutdowns and network takeovers.
Do the act’s provisions regarding OTTs or spectrum – despite solving current disputes – belong in legislation? Ideally, they should be reviewed based on emerging technological and market developments.
The act’s provisions limit the future role of the Telecom Regulatory Authority of India. The act could have sought to create a competitive market for communications to enable India’s citizens to enjoy the full potential of digital technologies while protecting consumers, networks and national security. Such a statement could arguably have provided policymakers, regulators and market players much-needed clarity and predictability. Unfortunately, that opportunity has been missed.
(Dr Mahesh Uppal heads ComFirst (India), a consulting company specialising in regulation and policy aspects of telecommunications and the internet)
