New Telecom Bill: Will It Get Marred By Controversy Or Usher In A New Phase Of Growth?

In its new avatar, the Bill will allow the Government to take over, manage or suspend the use of telecom services or networks for national security reasons, also creating the ground for administrative allocation of telecom spectrum, bypassing auctions.

 

The Bill seeks to replace a 138-year-old law—the Indian Telegraph Act 1885, which still governs the telecom sector—and could turn out to be another veritable storm that spectrum allocations have often caused in India. Handled nimbly, though, it could also be just a calming breeze in the proverbial teacup.

 

Much depends on how the authorities handle this potentially volatile cat, a decision which could lead to either a re-enactment or a reincarnation, for the stakes are high and the proposed changes quite radical.

If passed, the Bill will further invigorate OTT services and be a shot in the arm for the telcos such as Mukesh Ambani’s Reliance Jio, Sunil Mittal’s Bharti Airtel and Elon Musk’s Starlink.

 

An Overhaul Long Overdue

What does the Telecommunications Bill 2023 propose? To begin with, it is the first comprehensive rewrite of telecommunications laws in 138 years, consolidating spectrum, right of way and dispute resolution into a fresh statute.

It recommends doing away with the licensing regime and proposes only some ‘authorisations’ that will have to be obtained by telcos and other providers to offer services, defined as the “transmission of any messages, by wire, radio, optical or other electro-magnetic systems, whether or not… subjected to rearrangement, computation or other processes”.

 

The Bill indicates that it will not extend to online services such as WhatsApp.

Finally, authorisations will be required for “setting up networks” and “possession of radio equipment”.

 

Through the Bill, the Government also proposes to scrap the runaway plethora of regulations and laws that have accumulated over the last 138 years and give entities such as the National Frequency Allocation Plan statutory force more teeth. In effect, this means that while auctions will remain the “preferred” mode for allotment of spectrum, administrative allotment may also be used for services such as satellite TV and broadband that impact the masses.

Spectrum re-farming is also proposed to be allowed, which primarily means that allocated spectrum may be utilised by telcos other than the services it was initially acquired for.

For instance, 4G spectrum would be allowed to be repurposed for 5G under the new provisions and spectrum may be “harmonised”, which means strategically sharing the same across geographies. And if lying unused, spectrum may also be surrendered. All in all, more efficient and optimised utilisation of scarce airwave resources has been proposed.

 

Is There A Catch?

Are there any causes for debate or consternation in the Bill? Sure, there are, as is always the case with any new amendment proposed to any existing law. Two points stand out on this score, and we need to sift through the legalese in parts of the proposed Bill to unearth them.

 

One: “The Central Government may, if satisfied that it is necessary or expedient, in the interest(s) of national security, take over the control and management of, or suspending the operation of, or entrusting any authority of the Central Government to manage any or all of any telecommunication services, or any network or part thereof, connected with such telecommunication services.”

The above clause means that the Government may take over, manage or suspend any or all telecom services or networks in the interest of national security.

 

Two: “The Centre may, by rules, provide for measures to protect and ensure the cyber-security of telecommunication networks and services, and the measures may include collection, analysis and dissemination of traffic data that is generated, transmitted, received or stored in telecommunication networks.”

This is intended to address the issue of cyber-security and means that the Government can temporarily take over any telecom service or network even from an authorised entity, to ensure that messages of users authorised for response and recovery during a public emergency are given priority.

The Government can now formulate encryption standards, which means it can interfere with existing end-to-end encryption offered by services such as WhatsApp or Signal. While this will be seen by some as a blow to personal data security, officials charged with ensuring national security will argue that this will enable them to have standards, which will allow interception of messages in case of security concerns or needs.

 

The Bill also gives quasi-judicial powers to “authorised officers", which include powers of search and seizure as well as summons for information pertaining to legal proceedings flowing from the law that will finally be passed by Parliament. Rights groups fear that these provisions may be misused unless safeguards are built into the law in its final shape.

OTTs Let Off The Hook

The Bill may have caused some disappointment for telcos, who have been lobbying for a share in the revenues of OTTs who stream using the former’s network. Companies like Jio, Airtel and Vodafone have long complained how they bear the weight of OTTs data guzzling operations without any recompense. As a result, the average revenue per user (ARPU) for telcos is as low as US$1.7, while that of OTTs is five times more, averaging at US$8.6.

Telcos insist they have reached a breaking point. With more and more people consuming what the OTTs provide, especially in the post-Covid world, data traffic has grown manifold.The 2023Ericsson Mobility report puts the average data traffic per smartphone in India as the highest globally together with general communication channel (GCC).It is projected to grow from 26 GB per month in 2022 to around 62 GB per month in 2028 – a CAGR of 16 per cent. Total mobile data traffic is estimated to grow from 18 EB per month in 2022 to 58 EB per month in 2028 – a CAGR of 22 per cent.

The battle between the two powerful new economy sets of players has obviously not been decided by the new law and will possibly now extend into both the political arena and before the judiciary.

 

Cause For Concern?

There always will be, since empowering anyone rudimentarily and necessarily means taking some power and decision-making away from someone else. In the Bill, the Government has attempted to create a regulatory and legal framework that focuses on safe and secure telecommunications, providing for digitally-inclusive growth. Those that fall in the latter category, such as the Telecom Regulatory Authority of India (TRAI), will feel slighted as their authority will be curbed to some extent.

 

Further, the Government has proposed that it be vested with the power to waive entry fees, licence fee, penalty, etc., in the interest of consumers, ensuring competition in the market, availability or continuity of telecom networks. The Bill also seeks to ease rules like refund of fees for licence, registration, etc., in case a company surrenders its permit.

 

We have to face the truth that developments in the telecom sector over the past two and half decades have changed livelihoods, even lives, bringing Indians closer to the world of connectivity and digitisation, far more than any other social, governmental or Corporate overture could ever hope to achieve.

Today, Indians reach out to relatives, friends, even strangers, instantly. Our plumbers, carpenters, painters, electricians, drivers and even the humble sabziwaalas have today become a phone number. A single call, even a missed call, leads to easy access and instant connection. In recent years, mobile connectivity and smartphones have come to be reckoned as the biggest catalyst for digital transactions and financial inclusion.

 

Over the years, however, sledgehammer blows have been showered on Indian telecoms, which has been largely responsible for shaping a new India. We have had the ‘2G scam’, which was later deemed to be “not a scam” after all. There were issues around license fees, interconnect and termination charges, spectrum usage charges, AGR, annual spectrum auctions and due payments, finance charges and network expansion fees.

 

Some of these issues were responsible for making operators like Tata Teleservices, Uninor, Aircel, MTS and Reliance Communications unviable and thus forcing them to eventually shut down, undoing thousands of crores in investments and causing job losses in hundreds of thousands.

 

In some ways, the Telecommunications Bill 2023 is reminiscent of the National Telecom Policy (NTP) 2001, when spectrum was given on a first-come, first-served basis. That brewed up a storm and led to embarrassment and disrepute.

 

In the new scheme of things though, one is certain that this matter, which carries on its shoulders national security as much as it does for better prospects of the industry and sectoral growth, shall be managed more adroitly.

The last time around, a new policy sounded the death-knell for the industry. This time around, handled right, it could be the onset of a new sunrise.

 

 

 

 

(The author is a New Delhi-based journalist and communications specialist. Views expressed are personal)