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Summary: DoT proposes consultation paper on a new legal framework for the telecom sector

Key recommendations are simplified regulation, uniform infrastructure, and the USOF’s overhaul, among other areas discussed in the paper

What’s the news: Department of Telecommunications (DoT) of the Ministry of Communications proposed simplified telecom regulatory framework, uniform infrastructure, overhaul of USOF and spectrum management among other things in a consultation paper on July 23. The government asked stake-holders to comment on the “Need for a new legal framework for governing the telecommunication sector in India” paper  by August 25.

Citing new technologies such as 5G, Internet of Things, etc., DoT recommended the simplification of telecom regulatory framework, mergers and acquisition and uniform establishment of telecom infrastructure among other things. It also talked about ‘comprehensibility of law’ for citizens as ‘a desirable goal.’

Why it matters: An earlier consultation paper by the Telecom Regulatory Authority of India (TRAI) voiced stakeholder complaints about poor performance of core networks, ambiguity in licensing framework of IXP and limitations in connectivity and infrastructure, etc. This paper addresses some of these issues by suggesting simplified regulatory frameworks, smoother connectivity and clearer spectrum management provisions, as a potential boost for India’s telecom sector.

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Simplification of regulatory framework: Section 4 of the Telegraph Act states that the central government has the exclusive privilege to establish, maintain and work telegraphs. It allows the government to “grant a license on such conditions as it thinks fit to establish, maintain and work telegraphs.” Similarly, Section 5 of the Wireless Telegraphy Act provides “for licenses to possess wireless telegraphy apparatus.”

The consultation paper recommended a new law that builds on this framework, ensures regulatory certainty and promotes investment.

“This would mean continuity of licenses and authorizations under the old regime. To minimize policy disruption, such a law needs to provide for continuation of rules, guidelines, administrative orders issued under the existing regime until superseded by new rules,” said the paper.

To enable investments, it should also provide a framework for various players in the telecom value chain like service providers, infrastructure providers, Right of Way (RoW) providers, etc.

Right of Way for a uniform infrastructure: RoW is a framework for setting up telecom towers, laying fibre cables, settling disputes, and improve coordination among companies. In the consultation paper, DoT recommended provisions for a “regulatory framework to obtain RoW in a uniform, non-discriminatory manner for establishment of telecommunication infrastructure.” It also called for an effective dispute resolution framework relating to RoW.

The department called it a pre-requisite to achieving the full value of technologies like 5G. DoT stressed the expansion of telecommunication network and improvement of telecommunication services for smoother connectivity.

“In line with the vision of PM Gati Shakti initiative, the new framework needs to incorporate provisions for establishing common ducts and cable corridors in infrastructure projects to ensure integrated development of infrastructure,” said the paper.

Simplify mergers, acquisitions and other framework: The paper also recommended simplifying the framework for mergers, demergers and acquisitions, or other forms of restructuring. For this, it suggested that the law allow for any licensee or registered entity to comply with the scheme for restructuring as provided under the Companies Act, 2013, and inform DoT as required.

Overhaul of USOF: The paper suggested new ways to overhaul the current Universal Service Obligation Fund (USOF) – a fund that ensures the widespread and non-discriminatory access to quality information and communications services – with the wider concept of a “Telecommunication Development Fund (TDF).” DoT said this change can enable the growth of “indigenous companies in the technology space.”

Spectrum Management: Although a scarce resource, spectrum is ‘efficiently used’ in public interest, said DoT in the paper. It viewed spectrum “as a public good,” especially after the Covid-19 pandemic. The International Telecommunication Union (ITU) said that spectrum “must be managed in the interests of the national community as a whole.”

“At present, spectrum assignment is done through a combination of policies and court orders,” said DoT. In the paper, it called for a new law that brings in regulatory clarity and specific legal framework. The principle herein must be that spectrum will be assigned to best serve the common good and enable widespread access to telecommunication services. Such a legal framework for spectrum needs to:

  1. a) Enable the utilization of the spectrum in a liberalized and technologically neutral manner, and allow a spectrum assignee to deploy new technologies
  2. b) Maintain policy continuity, allowing the existing spectrum (and exemptions) assigned at present to continue for a specified time period
  3. c) Ensure flexibility to the central government for spectrum usage in public interest

Further, DoT said that repurposing of a frequency range for a different use and re-arrangement is often required for more efficient use of spectrum. Therefore, the department suggested re-framing and harmonization of the frequency range. Further, it recommended that the “central government may permit the sharing, trading, leasing and surrender of spectrum assigned, subject to prescribed terms and conditions, including applicable fees or charges.”

Provisions pertaining to Insolvency: The paper suggested that insolvency proceedings should not lead to suspension or termination of the license/ authorization/ assignment provided:

(a) telecommunication services continue to be provided and

(b) there is no default in payment of dues in relation to the telecom license or use of spectrum.

“This crucial balance between continuity of service and safeguarding public interests needs to be addressed under a new framework,” said DoT. The government body pointed out that spectrum is completely reusable unlike other natural resources. Spectrum has “no physical form and comes into existence only when it is used, thus having no vale if left unused.”

Public safety, national security and penalties: The paper said that the new law must have appropriate provisions in case of public emergency or public safety and for taking measures in the interest of national security. It should provide an enabling framework for the government “to prescribe relevant standards for telecommunication equipment, services, network and infrastructure.”

“The aim is to ensure public safety. This is all the more crucial given the widespread use of telecommunications, whether for education, or entertainment, or tele-medicine, or facilitating e-mandis,” said the paper.

Regarding penalties, it said the same should be “proportionate to offences.” Accordingly, provisions on these topics must be updated.

Update: Headline modified on July 29, 5.18 PM for clarity 

This post is released under a CC-BY-SA 4.0 license. Please feel free to republish on your site, with attribution and a link. Adaptation and rewriting, though allowed, should be true to the original.

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I'm interested in the shaping and strengthening of rights in the digital space. I cover cybersecurity, platform regulation, gig worker economy. In my free time, I'm either binge-watching an anime or off on a hike.

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