Date: 29/09/2022

Relevance: GS-2: Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

Key Phrases: Department of Telecommunications, Indian Telegraph Act, 1885, Indian Wireless Telegraphy Act, 1933, Telegraph Wires (Unlawful Protection) Act, 1950, Telecom industry, tele-density, Foreign Direct Investment, OTT Regulation, Bankruptcy or insolvency, Telecommunication Development Fund, Universal Service Obligation Fund, telecommunication services, Information Technology Act, 2000.

Why in News?

• Draft new telecom law attempts to re-imagine how telecom should be regulated but has some kinks that need to be sorted out.

Context:

• Last week, the Department of Telecommunications (DoT) followed up its recent consultation on a new telecommunications regulatory framework with a draft bill.
• This bill is intended to replace the Indian Telegraph Act, which has, since 1885, regulated all aspects of telecommunications in the country.
• The draft Bill also consolidates various separate acts which currently govern the telecommunication sector. i.e.
  • Indian Wireless Telegraphy Act, 1933,
  • Telegraph Wires (Unlawful Protection) Act, 1950.

Telecom industry in India:

• The Telecom industry in India is the second largest in the world with a subscriber base of 1.17 billion as of July 2022.
• India has an overall tele-density of 85.11 %, of which, the tele-density of the rural market, which is largely untapped, stands at 58.37% while the tele-density of the urban market is 134.78%.
• By the end of December 2021, the total number of internet subscribers increased to 829.3 million (narrowband + broadband subscribers), out of which 37.25% of the internet subscribers belong to rural areas.
• The number of broadband subscribers has increased to 807.42 million as of July 2022. The average monthly data consumption per wireless data subscriber has also increased by 22,605% to 14.97 GB in December 2021 from 61.66 MB in March 2014.
• The Telecom sector is the 3rd largest sector in terms of FDI inflows, contributing 6.44% of total FDI inflow, and contributes directly to 2.2 million employment and indirectly to 1.8 million jobs.
• 100% Foreign Direct Investment (FDI) has now been allowed in the Telecom sector under the automatic route.

Key Provisions of the Telecom Draft Bill:

• OTT Regulation:
  • One of the key changes is inclusion of new-age over-the-top communication services like WhatsApp, Signal and Telegram in the definition of telecommunication services.
• Dilution of TRAI Power:
  • The DoT has also proposed to dilute some crucial powers and responsibilities of the Telecom Regulatory Authority of India (TRAI) on issuing new licences to service providers.
• Bankruptcy or insolvency provision:
  • The DoT has also proposed that if a telecom entity in possession of spectrum goes through bankruptcy or insolvency, the assigned spectrum will revert to the control of the Centre. So far, in insolvency proceedings, there has been a lack of clarity on whether the spectrum owned by a defaulting operator belongs to the Centre, or whether banks can take control of it.
• Telecommunication Development Fund:
  • Draft Indian Telecommunication Bill 2022 also proposes to replace the Universal Service Obligation Fund (USOF) with the Telecommunication Development Fund (TDF).
  • With the TDF, the objective is also to boost connectivity in underserved urban areas, R&D, skill development, etc.
• Powers to Centre:
  • The draft Bill also accords the Centre powers to defer, convert into equity, write off or grant relief to any licensee under extraordinary circumstances, including financial stress, consumer interest, and maintaining competition, among other things.
• Provision of Refund:
  • The telecom ministry has proposed a provision for refund of fees in case a telecom or internet provider surrenders his license.

Some criticisms of New Telecom Draft Bill:

• Much of the criticism in the media has been levelled at the breadth of the law. like
  • In particular, the inclusion of over-the-top (OTT) services within the definition of “telecommunication services” is being seen as a step too far—requiring firms to obtain licences even if they are just providing services on top of telecom services.
  • The telecommunications law should only regulate the hard infrastructure that facilitates communications and stop short of regulating what happens in the software layers above that. Diluting this principle—by including even a small subset of those software layers in the definition of telecom infrastructure, would risk the future of data innovation.
  • Another problem with the draft is in the definitions. Loosely defined terms can transform otherwise sound legislation into a law riddled with loopholes. So this is where the draft falls drastically short of its promise.
    • For Example: “Telecommunication services” has been defined to mean services made available to users by telecommunication, which is not particularly helpful—even when read along with the list of illustrative examples.
  • Other terms have been defined so expansively that the synonyms strung together result in absurd outcomes in some of the contexts in which these defined terms are used.
  • The draft Bill has no provisions on cyber security of either telecommunications or related infrastructure. This assumes more significance given the fact that India does not have a dedicated law on cyber security. Hence, it becomes even more essential to address issues concerning cyber security in telecommunications.
  • No parameters have been stipulated for protection and preservation of security of telecommunication, its infrastructure, network and services. The liability of service providers in the context of breaches of cyber security has not been specifically addressed.
  • Another major area of concern is that the proposed Bill has been given the status of special law and it supersedes anything inconsistent therewith contained in any other law in force. It could be in direct conflict with India’s mother legislation on electronic format, the Information Technology Act, 2000, and therefore, it is essential that before the proposed law gets finalised, efforts must be made to ensure that there is no such conflict.
  • On the protection of users by stipulating preparation and maintenance of ‘Do Not Disturb’ register, there are no adequate parameters stipulated for effective implementation of the register.

Way Forward:

• The draft Bill represents an important step forward. However, there is a need to address the various concerns of the stakeholders, both public and private, in the telecommunication ecosystem in order to enable the legislation to be more effective, relevant and topical.

Source: Live-Mint

Mains Question:

Q. What are the key provisions of India’s New Telecom Draft Bill? Discuss the major areas of concern in that draft? (250 words).