Today, the telecom sector has become an enabler of digital governance that emphasises data-driven and people-centric delivery of goods and services to citizens and enterprises. The criticality of the sector was underlined during the Covid-19 pandemic when it emerged as a lifeline for the economy by enabling the digital economy to function.
Owing to rapid digitalisation, India has become the second-largest telecom market in the world today. In terms of growth, the number of telecom subscribers in India has grown from 15 million in 1997 to over 1,170 million today. This represents a phenomenal 19 per cent compound annual growth rate (CAGR) over a period of 25 years. However, a lot has changed during these 25 years.
Telegraph was first installed in India in the year 1851 and telephone exchanges were set up in the early 1880s. Following these developments, the Indian Telegraph Act, 1885 came into force on October 1, 1885. To regulate the possession of wireless telegraphy apparatus, the Indian Wireless Telegraphy Act, 1933 was passed and it came into effect on January 1, 1934. Similarly, to regulate the possession of telegraph wires the Telegraph Wires (Unlawful Possession) Act, 1950 was passed and it came into effect on April 1, 1951.
Since then, the technology and nature of telecommunications has undergone a massive change. To keep pace with emerging technologies, telecommunications legislation has evolved with time in most jurisdictions as well. These include the US (1996), Australia (1979), the UK (2003), Singapore (1999), South Africa (2000) and Brazil (1997).
Today, the emergence of new technologies such as 5G and internet of things (IoT) offer many opportunities to transform the lives of millions of Indians. In this regard, it is important to have a modern and future-ready legal framework which addresses the realities of telecommunications in 21st-century India. To this end, the Department of Telecommunications (DoT) has released a new consultation paper on the “Need for a New Legal Framework Governing Telecommunication in India”.
As per DoT, it is an opportune time for reimagining India’s legal framework governing telecommunications. The country needs a new law which is clear, precise and attuned to the realities of the sector for realising the potential of telecommunications.
A look at the key topics discussed in the paper…
Issues to be addressed by the new law
As per DoT, a new law on telecommunications needs to aim at establishing an enabling future-ready framework for the development of the telecommunications sector and deployment of new technologies. Such a law needs to consolidate the existing laws governing the telecommunications sector while keeping in mind global best practices. For this, a careful review of laws and best practices in other jurisdictions will also be needed.
Further, any new telecommunications law needs to be drafted in plain and simple language so that any citizen, who is reasonably aware of the telecommunications sector, is able to understand the contents of the law.
Simplification of regulatory framework
The existing regulatory framework for the telecommunications sector is based on Section 4 of the Telegraph Act to a large extent. The act grants the central government the exclusive privilege to establish, maintain and work telegraphs. It further provides that the central government may grant a licence on such conditions as it thinks fit, to establish, maintain and work telegraphs. Similarly, Section 5 of the Wireless Telegraphy Act provides for licences to possess wireless telegraphy apparatus.
There have been rapid advances in technology and a corresponding proliferation of licences, registrations, authorisations, permissions, etc. in the sector. The exclusive privilege of the government to do things necessary in the context of telecommunications to provide services, establish and maintain network and infrastructure is well recognised under laws of various jurisdictions.
A new law needs to build upon this framework. Further, this law needs to provide adequate provisions to ensure regulatory certainty and promote investment. This would mean continuity of licences and authorisations under the old regime. To minimise policy disruption, such a law needs to provide for continuation of rules, guidelines, administrative orders issued under the existing regime until superseded by new rules. Furthermore, the new law should provide a framework for various players in the telecom value chain such as service providers, infrastructure providers and right-of-way (RoW) providers to enable investments.
Spectrum is a scarce natural resource. Its efficient use is in public interest. In fact, the International Telecommunication Union (ITU) has stated that spectrum “must be managed in the interests of the national community as a whole”. The Covid-19 pandemic has shown that spectrum must be seen as a public good.
While, at present spectrum assignment is done through a combination of policies and court orders, a new law needs to bring in regulatory clarity and lay down a specific legal framework. The principle needs to be that spectrum will be assigned to best serve the common good and enable widespread access to telecommunications services.
Such a legal framework for spectrum needs to:
- Enable the utilisation of spectrum in a liberalised and technologically neutral manner, and allow a spectrum assignee to deploy new technologies.
- Maintain policy continuity, allowing the existing spectrum (and exemptions) assigned at present to continue for a specified time period.
- Ensure flexibility to enable the central government to use spectrum in public interest.
To enable more efficient use of spectrum, repurposing of a frequency range for a different use and rearrangement of a frequency range is often required. Therefore, the law needs to contain provisions for refarming and harmonisation of frequency range. Further, it needs to provide that the central government may permit the sharing, trading, leasing and surrender of spectrum assigned, subject to prescribed terms and conditions, including applicable fees or charges.
Despite the widespread availability of telecommunications in our country, tremendous improvement is required to ensure continuity of connectivity. As we move to better technologies such as 5G, their full value can be achieved only with smooth connectivity. Effective right of way is a prerequisite to achieve this and to enable expansion of the telecommunications network as well as improvement of telecommunications services.
The new law needs to provide a robust regulatory framework to obtain RoW in a uniform, non-discriminatory manner for establishment of telecommunications infrastructure. Such a law also needs provisions to create an effective dispute resolution framework relating to RoW.
In line with the vision of the Prime Minister’s Gati Shakti initiative, the new framework needs to incorporate provisions for establishing common ducts and cable corridors in infrastructure projects so as to ensure integrated development.
Framework for mergers, acquisitions
With a view to simplifying the framework for mergers, demergers and acquisitions, or other forms of restructuring, the new law needs to allow for any licensee or registered entity to comply with the scheme for restructuring as provided under the Companies Act, 2013, and simply inform DoT, as required.
Provisions pertaining to insolvency
The new law needs to address insolvency-related issues in the sector with a focus on continuity of service. There is a need to ensure that insolvency proceedings do not lead to suspension or termination of the licence/authorisation/assignment as long as:
- Telecommunications services continue to be provided, and
- There is no default in payment of dues in relation to the telecom licence or use of spectrum. This crucial balance between continuity of service and safeguarding public interest needs to be maintained under the new framework.
Unlike many other natural resources, spectrum is completely reusable. Therefore, considering the uniqueness of spectrum as a natural resource, the new law needs to provide for situations where spectrum is not being put to use due to insolvency.
Expanding scope of the USO Fund
The new framework also needs to consider ways to overhaul the current Universal Service Obligation Fund (USO Fund) with the wider concept of a “telecommunications development fund”. This can address the larger public purpose of ensuring delivery of universal telecommunications services to underserved rural and urban areas, research and development of new technologies, and promote employment and training activities. This will enable the growth of indigenous companies in the technology space.
As per DoT, penalties should be proportionate to offences. With this in view, the new law needs to consolidate and update the various provisions on penalties and offences.
Standards, public safety and national security
The new law needs to have appropriate provisions for addressing situations of public emergency, public safety and for taking measures in the interests of national security. Such a law needs to provide an enabling framework for the central government to prescribe relevant standards for telecommunications equipment, telecommunications services, telecommunications network, and telecommunications infrastructure.
Kuhu Singh Abbhi