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TRAI, DoT at odds over Work-From-Home, bank guarantee rules for Other Service Providers

The Telecom Regulatory Authority of India and the Department of Telecommunications exchanged disagreements over the last few weeks over regulations that govern Other Service Providers (OSPs), which are firms like call centers, tele-banking, outsourcing setups, and so on. In March 2019, TRAI had recommended that rules for OSPs be relaxed, especially for those who had employees work from home.

The DoT did not act on those recommendations, and only did so temporarily a year later when the COVID-19 pandemic forced companies to have employees work largely from their homes. There are a host of regulations that already exist for OSPs, that companies like Microsoft and Jio, and industry associations like the OSP Association of India, NASSCOM, and the US India Business Council, took issue with.

Notably, the DoT is concerned about wrongdoing that could emerge from having OSPs be loosely regulated, and wants data and processes to be localised within India. TRAI, on the other hand, argued that it was necessary to reduce barriers to improve ease of doing business and avoiding unnecessary paperwork.

What TRAI and DoT disagree on

  1. TRAI relents to DoT on VPNs: Virtual Private Networks (VPNs) are used to connect to a distant computer network, such as a company’s internal network. VPNs are usually connected to over the internet. TRAI recommended that a requirement that such VPNs be provisioned by a licensed telecom operator be removed.DoT demanded in its representation to TRAI that “traffic from the WFH agents to the Server or Gateway infrastructure shall in no way go beyond the country”. It also said that a DoT “agreement” should be required for allowing work-from-home. TRAI had said earlier that requiring telco-provisioned VPNs would hinder flexibility, and that any commercially available VPN should be allowed for use. But in response to the DoT’s localisation demand, TRAI conceded that since a security issue was involved, the DoT “may take suitable decision as deemed appropriate”.
  2. Categorising voice and non-voice OSPs: TRAI had recommended that OSPs be grouped by whether or not they provide voice-based services, like call centres. In response, DoT said that such a categorisation “may lead to misuse by OSPs based on Data/Internet for transiting voice calls”, and thereby bypassing laws that require phone calls to be placed on licensed networks.In response, TRAI argued that voice-based OSPs need to be monitored for whether they are bypassing long-distance calling regulations, and that data-based OSPs do their work over the internet, and don’t need that scrutiny. Instead of “registration” for such OSPs, TRAI argued, merely an “intimation” would suffice, where formats for voice- and non-voice-based OSPs would be identical. TRAI said that relaxing regulations would “[result] in ease of doing such businesses”.
  3. Bank guarantees a “barrier”: Requiring OSPs to provide bank guarantees as a part of registering their businesses was an entry barrier, TRAI argued. DoT responded that a graded bank guarantee regime, depending on the employee count, would act as a deterrent from wrongdoing. DoT added that instead of multiple bank guarantees there could be a single bank guarantee. TRAI responded to this saying that penalty provisions would suffice, and indicated that bank guarantees would harm India’s competitiveness for attracting OSPs’ business.”OSPs should be permitted to decide about the sharing of its own infrastructure and availing Work from Home facilities, as and when desired, without submission of any Bank Guarantee,” TRAI said.
  4. Licensing Contact Centre Service Providers: TRAI had recommended that Contact Centre Service Providers and Hosted Contact Centre Service Providers, who provide infrastructure to start a call centre, should not require a telecom license, as they are merely reselling access to licensed telecom services. DoT disagreed, saying that “CCSP/HCCSP performs the action of collection, carriage and delivery of the message”, and should therefore be licensed.TRAI responded that DoT’s understanding of the issue “does not appear to be correct”, and that CCSPs and HCCSPs obtain telecom resources from licensed providers. TRAI added that sharing cloud infrastructure is desirable, and reiterated its original stand.
  5.  Network diagrams: In its recommendations, TRAI had recommended that OSPs provide a “network diagram” with a list of components to the DoT, and in case of international OSPs, get this network diagram counter-signed by the telecom service provider whose service they are using. DoT replied that such a counter-signing should be required from all OSPs. TRAI dismissed this, saying that TSPs were required to make sure their networks were being used in compliant ways anyway, and that there was little “value addition” in getting diagrams countersigned by them. However, TRAI said that a copy of the diagram may be required to be sent to the TSP before registration.
  6. Localising call data: TRAI recommended that a private business telephone network (EPABX, or Electronic Private Automatic Branch Exchange), can be located outside the country as long as records pertaining to calls is made available to the government. DoT more or less concurred in response, but added that all such infrastructure and data should have real-time copies in India, but added that this was subject to approval from the Ministry of Home Affairs. TRAI agreed with this.
  7. Penalties and infrastructure sharing: TRAI had recommended that for infrastructure sharing among OSPs, requirements for getting an agreement signed by the DoT, a bank guarantee, and certification from hardware manufacturers, should be removed. DoT responded by repeating its stand that penalties should be applied on a graded basis, and that the severity of non-compliance should be considered. TRAI responded saying that “having discretion in application of penalty makes imposition of penalty a complex process, and more likely to be challenged”. However, TRAI agreed with DoT on grading penalties by severity.
  8. Connectivity of “data and voice path”: TRAI had recommended that channels used for voice and data communication should not cross over (so that telephone laws are respected), and that remote access should only be allowed from hardware manufacturers for maintenance purposes, and that such details should be shared with DoT immediately. DoT then asked TRAI to clarify the language of this recommendation, pointing out that OSPs were already allowed, as a “special dispensation”, to make voice calls on a local data network.In response, TRAI said that the goal of the recommendation was to keep data traffic separate from licensed voice calls. “To avoid the call flow between Public Network and Leased Line, the logical partitioning of EPABX is mandated,” TRAI said. On the language that DoT sought clarity on, TRAI pointed to different parts of its recommendations and said that “there appears to be no confusion” in what it has said.

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I cover the digital content ecosystem and telecom for MediaNama.

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