Abhishek Malhotra, Managing Partner, TMT Law Practice
Umang Das, Chairman, Foreign Investors India Forum
Since its launch, the draft Indian Telecommunications Bill, 2022 has been in discussion across the industry. At tele.net’s recent conference, “Telecom Infrastructure in India”, Abhishek Malhotra, managing partner, TMT Law Practice, and Umang Das, chairman, Foreign Investors India Forum, talked about the key aspects of the draft bill. Edited excerpts…
Two primary aspects of the draft Indian Telecommunications Bill are the expanded definition of telecommunication services and the proposed limitations or curtailment of the powers of the Telecom Regulatory Authority of India (TRAI).
Expanded definition of telecommunication services
The proposed definition of telecommunication services in the bill includes broadcasting services, as well as voice, video and data communication services, without further clarity on the areas that are going to be licensed. Unless greater focus is given to the exclusions and provisions under the bill, there will be a problem of overlap of jurisdiction between the Ministry of Information and Broadcasting (MIB), the Department of Telecommunications (DoT), and the Ministry of Electronics and Information Technology.
The earlier Indian Telegraph Act, 1885, was media-neutral, which enabled the country to sustain fair business growth within the limits of the original definition of telecom services. The new expansive definition of telecom services in the bill indicates a shift towards regulating all services that have touchpoints with consumers. Which part of those services will be regulated has not been clarified.
The Government of India (Allocation of Business) Rules, 1961 designated the MIB to legislate all matters related to radio and television broadcasting as well as films and audio-visual programmes made available by content providers, among other things. However, the inclusion of broadcasting services in the definition of telecommunication services indicates that all types of broadcasting services will be regulated, at least initially. The question is, how will the government address the overlap that is apparent in this definition? There is also no distinction between carriage services and content regulation in the proposed text.
Moreover, the bill seeks to regulate over-the-top (OTT) communication services, despite references in the body of legislation suggesting that, overall, “communication” consists of voice, video and data communication. Whether this will also include the content on OTT platforms is unclear. Several news reports suggest that there is no intent to regulate the content part of these services, but this is not borne out by the draft bill.
Ideally, when seeking to regulate technological developments such as OTT services, the principle to be implemented is “same service same rules”. TRAI was previously tasked with this responsibility, pursuant to a consultation process commenced after a request from DoT. After studying the OTT sector for five years and looking at international regulations and practices, TRAI concluded that there was no need to regulate the OTT sector at all. In November 2020, it also stated that it would be following developments internationally and at the International Telecommunication Union (ITU), in order to take a decision on whether there is a need to bring OTT services under the purview of regulation.
There are several issues with the inclusion of OTT services. First, OTT services operate in layers that are different from the network and application layers. Second, these services do not operate telecom networks, nor do they lease capacity. Further, OTT services were specifically rejected as a subject matter for regulation as recently as November 2020. Moreover, a regulatory framework already exists for OTT services. They are regulated under the Competition Act from a competition perspective, but more importantly, also by the Information Technology Rules notified in February 2021.
Curtailment of TRAI’s powers
A regulator is extremely important in any sector, because it performs a role independent of the government while at the same time providing recommendations for the orderly growth of the sector and protecting the interests of all stakeholders. The draft Indian Telecommunications Bill seeks to curtail this power of TRAI, specifically on matters of spectrum licensing. The apprehension is that, if this happens, DoT is going to become a super-regulator while also continuing to be a competitor through government networks. This is inherently against the principle of separation of powers that has been envisaged in the country’s constitutional set-up, as well as in the manner in which regulations have been implemented previously.
Apart from regulatory powers, there is also a large list of provisions under Section 11(1)(a) of the TRAI Act, which stipulates the heads of the recommendatory powers of TRAI. Most importantly, TRAI is an independent entity, statutorily created with an obligation to ensure an orderly growth of the telecom sector. When dealing with a sector that sees significant investments and constant upgradation of technology, there is certainly a need for an interface between industry and the government, which is the role performed by the regulator. Taking away these powers of the regulator will wreak havoc.
The government’s aim has been to remove all policy roadblocks and ensure speedy roll-outs. The release of the draft Indian Telecommunications Bill reflects this line of thinking. It is a complete bill that takes over all the previous acts, and to this extent, is very welcome.
Defining digital infrastructure
Infrastructure is an important area from the policy perspective. It is necessary to differentiate between telecom infrastructure and digital infrastructure. “Digital infrastructure” covers a wider ambit and must be seen from the consumer perspective.
Previously, the passive infrastructure concept essentially revolved around fibre and towers. Today, within the comprehensive ambit of digital infrastructure, data has primacy. The infrastructure should thus be called digital infrastructure and defined accordingly, in order to reflect this. The concepts of passive and active infrastructure should be done away with, and they should be viewed in an integrated manner. Instead of just fibre and towers, the definition must also consider small cells, shared radio access networks, transmission technology, antennas, street furniture and all those components that need to be set up when infrastructure is extended till the last mile. The most obvious example of such roll-outs is in-building solutions (IBS), where active and passive infrastructure go hand in hand.
The ultimate purpose of digital infrastructure should be sharing. If infrastructure is to be shared, rapidly rolled out and cost-optimised, then digital infrastructure is the goal. As we move forward, digital infrastructure will include other elements such as cloud infrastructure, edge computing and content data networks.
Infrastructure sharing has also been well supported by various government regulations such as the National Digital Communications Policy (NDCP), 2018, which has already acknowledged the three objectives of connecting, propelling and securing India. Connecting India means enhancing the role of infrastructure providers in order to include both active and passive elements. The NDCP is a cabinet-approved and gazetted document and was also supported by TRAI when it came out with its recommendations for IBS. Internationally, the ITU recommendations also cover these elements. We should be futuristic in our approach, understand emerging customer applications, and define digital infrastructure accordingly.
In a different context, TRAI recommended the unbundling of networks in 2021. In doing so, it clearly differentiated between telecom network providers and service providers. Interestingly, the draft Indian Telecommunications Bill also recognises two categories, one for licensed service providers, and the other representing infrastructure providers by virtue of registration. The difference between the two is that the registrant or the infrastructure provider services the needs of service providers, and does not go to the end consumer. Meanwhile, service providers approach end consumers under a business-to-consumer model. Such a distinction is a win-win resolution as service providers will have the benefit of infrastructure providers sharing and rapidly rolling out their networks, while they themselves cater to the needs of consumers.
The way forward
The whole idea of infrastructure sharing is to optimise and rapidly roll out infrastructure, while differentiating infrastructure from services. The government has launched the Gati Shakti model, which is also an integrated infrastructure approach wherein telecom will play a key role in roll-out, while coordinating with all the other infrastructure bodies. There is a need to relook at the definition of infrastructure and the prime principles that consumers will be looking for. The consumer today focuses entirely on content and services in a digital format. Meeting this requirement should be the direction to head towards.
