Draft Telecom Bill: What does it say, why there is controversy over it

The bill provides a regulatory framework for spelling out the govt's role in telecommunication services and networks; telecommunication equipment and infrastructure; and spectrum and its assignment

A draft bill that proposes to regulate Indian telecom has prompted debate among companies and citizens alike, given its wide scope and impact. 'Business Standard' explains what the bill proposes, why it is controversial, and when will it become law.

Draft telecom bill

On September 21, the Department of Telecommunications (DoT) released the draft Indian Telecommunications 2022 bill to replace three laws made many decades ago. The legislation updates terms for telecommunications in the modern age.

The 40-page bill provides a regulatory framework for three key areas, spelling out the government’s role in telecommunication services and networks; telecommunication equipment and infrastructure; and spectrum and its assignment.

These subjects have seen public debate over concerns about the regulation of privacy, competition in the sector, jobs and investment, consumer protection, and technology.

Key recommendations

The bill gives the government a wide range of powers in its relationship with telecom companies. It allows the government to offer write-offs, conversion of dues into equity, deferment, and relief on default of payment by companies due to financial problems if required to protect the interest of consumers or ensure fair competition reliability or the continued supply of telecommunication services.

The telecommunications bill aims to enable a legal framework to prevent the harassment of users from unauthenticated sources. It says that the prior consent of users is necessary before offering any promotional services or advertisement.

The bill has a framework for enforcing rules on the right of way (ROW), establishing how digital communications infrastructure will be laid out in states and municipal corporations. This framework is key for the rollout of 5G services, which require a huge increase in the telecom fibre backbone.

Cause for controversy

The bill proposes granting the government the ability to intercept messages in "the event of any public emergency or in the interest of public safety." It also provides the authorities immunity against any lawsuit.

The government will have the power to terminate auction allocations partly or in full, if it determines that spectrum that has been assigned, has remained unutilised for insufficient reasons for a prescribed period.

The DoT has not heeded companies' appeal to discontinue or suspend the USO Fund levy--the government set it up to take mobile and internet connectivity to rural areas--until the unutilised surplus cash of around Rs 60,000 crore is used. The bill instead merely changed the levy’s name to the Telecommunications Development Fund, giving it powers beyond merely taking telecom services to the underserved rural and suburban areas.

OTT apps

The bill extends the definition of telecommunications services to include OTT services such as WhatsApp, Signal, Zoom, Skype, Google, and Telegram which provide (voice or video) calling and messaging services. Based on the draft law, these internet-based service providers will be subject to similar rules as other telecom companies.

The definition was amended after telecom service providers such as Airtel and Reliance Jio said that they require a level-playing field as OTT communications and satellite-based services offer audio and video calls and messaging without paying for licence or spectrum.

Media reports have said that the government only intends to bring specific OTT services aimed at communications under the auspices of the draft bill, and not all apps with OTT embedded in them.

Companies with OTT app are set to meet the DoT separately to put forward their demand, saying that their services are different and not in line with those offered by larger telecom companies.

Spectrum allocation

Alleged corruption in the allocation of 2G spectrum hurt the UPA-II government’s image almost a decade ago. The current National Democratic Alliance government’s draft bill proposes that spectrum can be assigned through both auction or administrative process, depending on the requirement.

The bill lays down a framework for spectrum assignment, primarily through auctions and administrative allocation in special cases.

These special cases relate to government and the public interest, such as defence, transportation, and research, when spectrum can be assigned through the administrative process. This provision is expected to resolve the confusion caused by the Supreme Court order of 2012, which was interpreted to mean that all spectrum can only be auctioned.

To enable more efficient use of spectrum, the Centre has also reserved its right to may also re-farm or harmonize any frequency range assigned by auction, or administrative process.

Also, it proposes the Centre may establish a monitoring and enforcement mechanism to ensure adherence to terms and conditions of spectrum usage and enable interference-free use of the assigned spectrum. Similarly, the spectrum allocated to telecom companies presently undergoing insolvency, that are unable to offer services, pay dues or comply with license conditions, will be taken back by the government.

Bill to law

Telecom Minister Ashwini Vaishnaw has said the new telecom bill is expected to be in place in the next 6-10 months but the government is not in a hurry. The government had initially placed a deadline of October 20 as the final date for receiving comments by industry stakeholders on the bill. This has been extended to October 30 by the DoT to enable more discussions.

The bill will be discussed in Parliament’s winter session, which usually starts in the last week of November.

Officials have said the Bill’s enactment date may be extended further given how many of the provisions have seen a strong response from the industry. Case in point, the DOT is set to meet with industry executives later this week to discuss crucial aspects of the bill.