The new Indian Telecommunications Act, 2023 was passed by Parliament in December 2023. The new act replaces the Indian Telegraph Act, 1885 and the Indian Wireless Telegraphy Act, 1933. The repealed laws were enacted way back in history when communication technology was in its infancy.
The concept of communication devices such as the smartphone (or the mobile phone for that matter), the internet, platforms such as social media, television, radio and audio-visual content riding on those technologies, did not exist. Nor was there private participation, competition or regulation anywhere on the horizon, with the government being the monopoly provider of services.
There are some misgivings that the new act was passed in a hasty manner and some industry stakeholders feel it has been drafted and passed without proper consultation with the industry. That being said, the new act does help to clarify some of the policy attitudes towards this extremely important sector, which is fundamental to any modern economy.
The past two decades have seen technology evolving at bewildering speeds, and it is inevitable for legislation to catch up. There has been enormous litigation centred on matters such as the policy for spectrum allocation, licensing, content regulation, monitoring of communications for security, and protection of the citizen’s right to privacy.
All of these come into the picture because the sector is of enormous economic importance and it has large positive externalities. Entire industries such as IT, entertainment, banking and logistics are completely dependent on it. So are a host of consumer-facing businesses, as well as industrial units and manufacturing infrastructure. The government increasingly provides digital services as well, and the vision of Digital India depends on smooth, seamless, affordable telecommunication across the country.
The new act clarifies the process and policy of spectrum allocation. It allows for a more nuanced approach based on the specifics of the technology and usage. It also allows for different methods of allocation based on the intended use of the spectrum.
The new act makes some changes that will alter industry dynamics. These include:
Ensuring technology neutrality: The centre can facilitate spectrum utilisation in a flexible, technologically neutral manner. This may foster a level playing field for different technologies.
Facilitating R&D: The act provides for regulatory sandboxes, test beds, etc. The government can administratively assign spectrum for scientific research, satellite communication, national security, disaster management, and testing for emerging technologies. This will encourage innovation since it allows for testing new concepts in controlled environments, granting exemptions, allowances or time-bound exceptions. Hence, this empowers the start-up ecosystem.
Reducing spam: Spam is a permanent irritant. The act empowers the government to prescribe measures for protecting users. The recommended measures include obtaining prior consent, preparation and maintenance of “Do Not Disturb” registers, and mechanisms to report malware and unsolicited messages.
Simplifying right-of-way (RoW) approvals: The act clears regulatory barriers for RoW in private properties and urges all public entities to grant permission quickly, within prescribed timelines. Rejection of an application by a public entity requires reasonable grounds. This will significantly accelerate fibre induction and improve quality of service (QoS).
Granting the right to intercept: In the interest of public emergency and public safety, the new act gives broad discretion to the government to intercept and monitor messages or a class of messages. This may impact privacy, so it is extremely important to put in place checks and balances to prevent any misuse of these provisions.
Allowing the right to suspend services: Section 20(2)(b) of the telecom act, allows the state to suspend telecommunication services in the interest of public safety or sovereignty “in such manner as it may be prescribed”. The lack of an explicit threshold for such suspensions raises concerns about potential misuse, particularly since India is already infamous for the number of internet shutdowns. Again, checks and balances need to be built into this.
The privacy concerns mentioned above need further clarification. Section 20(2) enables interception of telecommunications and grants the power to intercept services to the central government, the state government and “any authorised officer”. This may be excessive oversight and may conflict if read along with the Digital Personal Data Protection Act, 2023 (DPDPA) since it exempts the central government from abiding by the fundamental principles of privacy that require “free” and “informed” consent to be sought prior to processing personal data by way of Section 16(2) of the DPDPA.
Allowing the state and its officers expansive and unbridled power to collect data could lead to extensive misuse of data. Also, the provision, “disclose in an intelligible format to the authorised officer, upon directions”, under Section 20(2)(a) signifies an intention to breach end-to-end encryption. Individuals and corporates could be left vulnerable to misuse of this section unless explicit checks and balances are written in via amendments or rules.
The new act does clarify some of the ambiguities centred on the distinction between the telecommunications network and the content and application services (CAPS) it supports–the so-called over-the-top (OTT) services. An earlier draft contained an all-encompassing definition of telecommunications services, which extended to OTT content and applications. That led to fears that OTT players would require a licence or authorisation to operate. The act removes this explicit reference to OTT services, even though some confusion remains.
The act now excludes OTT platforms from the definition of telecommunications services, but the broad definitions of “telecommunications” and “message” do leave some ambiguity regarding the legislator’s intent. This could be interpreted to bring OTT platforms under the telecom act’s purview, and to consequently extend the act’s reach across a wide range of services. This underscores the need for additional clarification to ensure that the telecom act adheres to its intended scope in light of the fact that the recently introduced Broadcasting Services (Regulation) Bill, 2023 already provides a framework for all types of broadcasting services, including OTT platforms. This area of confusion will need to be further clarified since there could be a conflict between the two acts.
Importantly, the new act clarifies the process and policy of spectrum allocation. Earlier attempts failed to fully anticipate the diverse scenarios of spectrum use for telecommunications, for example in access, backhaul and satellite communications. The earlier draft raised the prospect of auctioning satellite spectrum, an approach that is globally considered inappropriate and inefficient since satellite players do not need spectrum for exclusive use. The new act allows for a more nuanced approach based on the specifics of the technology and usage. It allows for different methods of allocation based on the intended use of the spectrum.
The new act gives broad discretion to the government to intercept and monitor messages or a class of messages. This may impact privacy, so it is extremely important to put in place checks and balances to prevent any misuse of these provisions.
The administrative allocation of spectrum for satellite broadband services is pragmatic, aligning India with global norms and fostering competition for improved connectivity in underserved regions. The replacement of the Universal Service Obligation Fund with “Digital Bharat Nidhi” is also forward-thinking, broadening the scope for investing in research and development, which may support India’s contribution to emerging technologies such as 6G and edge cloud.
However, the act’s provisions limit the future role of the Telecom Regulatory Authority of India (TRAI), giving more power to the administration. By limiting the independent regulator’s powers, it may have left room for further controversy. It could have left more issues to be settled by an independent sector regulator based on the realities of technologies, markets and consumer concerns.
While acknowledging the positives, the act does have certain areas that need attention. Future amendments, through mutual consultation, can address issues such as the regulatory status of OTT apps, align exemptions to government interception of encrypted messages with constitutional privacy rights, and clearly define national security issues that may trigger government takeover or suspension of telecom networks.
The telecom ministry, industry bodies, telecom operators, the Ministry of Electronics and Information Technology, regulators and various stakeholders will have to consult and collaborate to address these issues effectively.
Devangshu Datta
