TRAI concern over power dilution in reforms draft
The proposed Indian Telecommunication Bill, 2022 was to bring a step change in the sector, but the first draft evoked a sense of unease.
The proposed Indian Telecommunication Bill, 2022 was to bring a step change in the sector, but the first draft evoked a sense of unease. Telecom is the most regulated industry, and its laws are as old as the hills dating back to 1885. Reforming the sector is a challenge. The draft bill rightly attempts to replace all the three existing legislations, namely, Indian Telegraph Act, 1885, the Wireless Telegraphy Act, 1933, and the Telegraph Wires (Unlawful Possession) Act, 1950.
However, it inadvertently seems to have given overriding powers to the Department of Telecommunications, weakening the Telecom Regulatory Authority of India (TRAI) instead of giving it more teeth. Besides, concerns were also raised over licences and services, prompting Union Communications Minister Ashwini Vaishnaw to step in and reaffirm the government’s intent favouring only a light-touch regulation.
The draft bill draws extensively from unified telecom legislations like the UK, Australia and Singapore and jurisdictions like Japan and the US, which have somewhat sporadic laws. Still, in the process, it created complications in some crucial aspects. For one, over-the-top services (OTT) providers are left baffled as a licensing regime will apply even to software platforms operating using internet bandwidth, ranging from calling and messaging applications to software updates.
According to law firm Cyril Amarchand Mangaldas, several SMEs provide OTT services that operate using networks provided by licensed entities. There’s little benefit in creating an overlapping licensing regime. The cost of compliance may well make these businesses unviable. While some form of regulation is acceptable, licensing for software and platforms is unusual, and no country has such a system. The proposal needs an essential relook.
The stated intent of liberalising the sector and reducing procedural delays is commendable. Policy watchers, however, are not specifically enthused about the proposed ‘right of way’ for networks and infrastructure, given the wide-ranging delays, penalties and litigation with local public works departments and municipalities. The bill needs to put more meat on the bones.
That said, deferrals and exemptions for distressed entities or insolvency or inability to honour license payments for extraordinary reasons provide relief and could encourage telcos to invest. In sum, the bill is a timely intervention but needs improvisation to reduce the administrative and compliance burden of all stakeholders.