DH Deciphers | India's new draft telecom bill

The Indian government has developed a draft bill in a bid to reform the telecom sector. It expects the bill to boost the ease of doing business and investor interest in the sector. Industry experts warn the bill lacks clarity on many aspects from consumer privacy to potential for government interference. In this piece, Chaitanya Netkalappa analyses the pros and cons of the bill.

Why is the government introducing a new telecom bill?

Telecommunications were governed by the Indian Telegraph Act of 1885, the Wireless Telegraphy Act of 1933 and the Telegraph Wires (Unlawful Possession) Act of 1950 previously. The nature of telecommunication, its usage and technologies have undergone a massive change since the telegraph era. With the advent of new technologies since 1885, there is a need to update the regulatory framework to bring it in tune with the changing times. As we now live in an era of Whatsapp, 4G, 5G and over-the-top (OTT) platforms, the old regulatory framework was thought to be inadequate.

What’s in the new bill?

The bill lays down a comprehensive regulatory framework for the telecom sector. Among other things, it broadens the definition of telecom services by including OTT, Internet-based and satellite-based communication services within their purview. This will mean that social media apps such as WhatsApp, Signal and Telegram, which provide calling and messaging services, will be under its ambit. The bill also lays down explicit statutory framework and regulatory clarity for the Central Government to undertake spectrum assignment. The underlying philosophy is that spectrum assignment should serve the common good and ensure widespread access to telecommunication services. The bill provides for assignment of spectrum primarily through auction. For certain specified functions relating to government and public interest such as defence, transportation and research, the bill provides an enabling framework for assignment of spectrum through administrative process.

How will I be affected?

The draft bill proposes powers to the government to order internet shutdowns or intercept communications including messages. The bill proposes to exempt “press messages that are intended to be published in India” of correspondents accredited to the central or state government from interception. However, the exemption will not be granted in case of any public emergency or in the interest of the public safety, sovereignty, integrity or security of India, friendly relations with foreign states, public order, or to prevent incitement to an offence, according to the draft. Thus, there are situations where your messages could be read by the government. The good news is that the bill creates a “do not disturb” register that requires the prior consent of the user for receiving a certain class of messages such as marketing calls.

What happens to the Telecom Regulatory Authority of India?

Currently, the authority tasked with regulating the telecom sector is the Telecom Regulatory Authority of India (TRAI). With this bill, the government seeks to take over much of TRAI’s power and vest it in its own hands. Such a scenario could potentially weaken the regulatory environment, lead to greater government interference in policymaking, hurt consumer interests and even lead to a decline in the quality of telecom services.

Who else benefits from this draft bill?

Some telecom analysts expect the draft telecom bill to pave the way for more relief to companies such as Vodafone Idea (Vi). “The bill allows the government to provide relief via partial/full write-off or deferment of dues or conversion into shares in cases of payment default in extraordinary circumstances. This could be positive for Vi if the government decides to waive some of its dues in future,” JM Financial said in a note. Some others did not expect the government to immediately exercise such powers. “Waiving off dues is unlikely in case of Vi as long as it continues to have non-government shareholders,” Credit Suisse said.