What's New

Draft Telecom Bill: Negative impact on digital ecosystem, say tech companies

Why in News?

Various industry groups and tech companies have recently commented on the proposed telecom Bill.

More about the news

• Recently the government released the draft of “The Indian Telecommunication Bill, 2022”.
  • In the draft government proposes significant changes like
    • Provisions for waiving off dues for financially stressed operators,
    • Bringing over-the-top (OTT) platforms within the ambit of telecom services that require a licence to operate, and
    • Provisions for message interception in case of public emergency.
  • Recent opinions of the industry groups and tech companies:
    • On the over-the-top (OTT) platforms:
      • The government should keep internet communication services such as WhatsApp, Google Meet and Signal, and other internet-based services outside the purview of the draft telecom Bill.
      • Industry groupings representing top tech firms including Apple, Amazon, Google, Meta, and Microsoft have said this arguing that such a prescription would be against global standards.
    • On the telecommunication services:
      • BSA -The Software Alliance has expressed that the “overbroad” definition of telecommunication services in the proposed telecom Bill could “have a negative impact on India’s digital ecosystem,”.
      • Not clearly defined:
        • The Information Technology Industry Council (ITI), another industry group, has told the DoT that terms such as “internet-based communication services” and “interpersonal communication services” that are part of telecom services under the proposed Bill have not been defined clearly, which “can lead to regulatory overlap and ambiguity”.
      • International standards:
        • The groups have cited that in countries like the European Union, Australia, South Korea and the United Kingdom, regulators have not imposed stringent telecom and licensing requirements on digital services.
        • International Telecommunication Union has not prescribed any regulatory mechanism for OTT communication services.
        • They also added that India has made certain commitments at the World Trade Organization (WTO) for both national treatment and market access for certain telecommunications services, which such new licensing procedures could “nullify”.

Draft Indian Telecommunication Bill, 2022

• Aim of the Bill:
  • Reforming existing telecom laws and regulations, and making them future ready.
  • 
• Key Provision of Bill:
  • License for OTTs:
    • Bringing OTTs under the ambit of telecom services means that OTT and internet-based communications would require a license to offer services.
    • OTT Platforms have to obtain a license from the government just like other telecom operators.
  • Interception of Information:
    • Information transmitted and received over telecommunication services could be intercepted by an authorised official of the government in the interest of the:
      • Sovereignty,
      • Integrity or security of India,
      • Friendly relations with foreign states,
      • Public order, or preventing incitement to an offence.
    • Clarity on Spectrum Assignment:
      • The Bill reaffirms the government’s authority to assign spectrum, with or without auction, and declares common good and access to telecom services as the objective for spectrum assignment.
    • Changes in TRAI Act:
      • At present, the TRAI Act requires the government to seek the regulator’s recommendations before issuing licences to service providers.
      • It also allows the TRAI to request the government to furnish information or documents necessary to make recommendations. These powers have been proposed to be removed in the new draft Bill.
      • The TRAI may direct operators “to abstain from predatory pricing” that is harmful to overall health of telecom sector, competition, long term development and fair market mechanism.
      • A current provision in the TRAI Act which prohibits the appointment of a government official as TRAI’s chairperson who has not served either as Secretary or Additional Secretary has also been proposed to be removed in the new draft Bill.
    • Wide expanse of shutdown and surveillance powers:
      • The Bill allows the government to direct suspension of transmission of messages or provision of telecom networks or services.
      • These powers are much wider than the currently existing framework on internet shutdowns and interception, and include directions for interception and disclosure of data, and suspension/ surveillance of messages “relating to any particular subject”.
    • Easing criminal penalties:
      • The Bill removes several redundant penalties:
        • Imposes a quantum of penalties based on severity; and
        • Introduces settlement of offences by payment of fines, and voluntary undertaking.

Other issues & challenges regarding the Telecom bill

• Diluting TRAI’s powers:
  • The concerns were regarding the possible dilution of powers of the Telecom Regulatory Authority of India (TRAI) in the proposed telecom policy.
  • Bill undermines the regulator, by proposing to “take away the TRAI’s statutory independence, and seeks to make it subservient to the government”.
• End-to-end encrypted:
  • It is unclear how these provisions could potentially impact calls over WhatsApp which are typically end-to-end encrypted; meaning the company itself does not have access to the information being transmitted over such calls.
• Content regulation:
  • There is no law or autonomous body to monitor and manage the digital contents provided on these OTT platforms and it is made available to the public at large without any filter or screening.
• More Power is Needed:
  • The OTT platform handles high-resolution video data. As a result, operating these platforms will require additional power.
  • The rising demand for storage capacity is due to increased electricity, energy, and fiber capacity use.
• Piracy of videos:
  • Since the beginning of regular television, piracy has been a concern.
  • Video piracy affects a business a lot of money, as well as users and reputation.
  • User data and content leaks are both at danger when OTT platforms are hacked.
  • In the United States, about 21% of the population watches pirated television.

Way Forward

• The Bill would augment the ease of doing business and considerably reduce the threat of criminal prosecution for operational issues faced by telecom operators.
• Given the dynamic and multifaceted nature of Internet-based services, subjecting them to a telecom licensing regime with criminal penalties could stifle innovation or even isolate the Indian market.
• Government is also considering removing almost all TRAI-related amendments proposed in the draft telecom policy and bringing in a separate Bill with the objective of strengthening the TRAI.