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Draft Telecom Bill 2022: Are the licensing provisions overly broad? #NAMA

Participants in MediaNama’s recent discussion on the draft telecom bill said that licensing requirements are over broad and tread on free speech too

telecom bill discussion medianama

Key Takeaways: 

  • A regulator never treats all providers or services equally especially if the entity has a dominant position in the market.
  • Democratic governments have functions; they do not have exclusive privileges.
  • The scope of the bill subjects almost all digital services to a licensing framework that includes video, cloud, broadcasting, and internet platforms, among others.
  • The government should consider dusting off the Communication Convergence Bill from 2001 which had better checks and balances than the present draft bill.
  • Licensing should be restricted to telecommunication services which access spectrum in order to delineate between content and carriage.
  • A licensing framework can have a chilling effect on people’s ability to disseminate speech given the government’s privileges under the bill.

“…the same service, same rules (argument) is quite poorly presented in my view. (The service) is provided by different players in different types of markets, etc., so they’re not peers irrespective of whether the same service is provided,” a participant said during a discussion organised by Medianama on the draft Telecom Bill, 2022 at India Habitat Centre, Delhi.

The speaker explained that no economic regulator treats all providers or services equally. “You’re regulated differently if you’re a market dominant player,” he said, adding that proponents of the same service, same rules do not believe in the premise themselves.

He also pointed out that the proponents (telcos) are perfectly happy that an entry fee for Delhi is different from Bihar. “They’re perfectly happy that the reserve price spectrum is different between West Bengal and Jharkhand. They don’t apply that rule so consistently as is implied,” the participant said.

The discussion centred around the impact of the bill’s provisions on the telecom sector and the internet. However, the following post will focus on the move to direct OTT services like WhatsApp, Signal, Zoom, etc. to obtain a licence to operate in India.

The transcript has been edited for purposes of brevity and clarity.

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Key highlights

What is the scope of the bill?

A speaker said that the definition of telecommunication services “brings almost all digital services under a licensing regime” because the bill holds licensing to be the government’s “exclusive privilege”. The Indian government has delicensed almost all activities but this bill practically brings almost all activities under a licensing regime.

Nikhil Pahwa, who moderated the event, commented that the government has not left anything out of the ambit of the definition of telecommunication which also includes broadcast, video, cloud, and internet-based communication.

An attendee said that the Indian Telegraph Act is the law in many countries including Malaysia because it all came from one place. “…most of the new telecom services in this country got licensed in the 90s. There used to be a telecom licence for email in this country. The internet started around that time, VSAT, paging, PMRTS, even mobile, etc. The government did not have to change the definition in the Indian Telegraph Act 1885. The act is so good from a definition’s perspective that a good lawyer could even argue that even telepathy needs a telecom licence.”

He also said that a bill from 2001 called the Cmmunication Convergence Bill had a better structure overall with better intent and checks and balances than the current one. He recommended that the draft of the bill should be dusted off and revised and then it should be discussed further.

Should licensing be limited in scope?

An attendee suggested that “telecommunication services should be restricted to the activities of those entities that have been allotted this scarce natural resource (spectrum) as far as licensing is concerned”. Everything else should be regulated by the IT Act or the proposed Digital Act, the attendee added. “There needs to be segregation between access and services,” he said.

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The moderator chimed in that access services with spectrum should be regulated and licensed, and the rest should be free for all. “There is no rationale to licence anything that is not an access service provider using a scarce resource called spectrum. There needs to be a separation of content from carriers,” he added. He warned that the regulators will keep mixing up industries and services if there is no separation.

A participant suggested that the definition should be trimmed down by taking off OTT or one can include it with guardrails resembling a tiered regulation.

Another attendee suggested that the actual phrasing of the power of licensing and registration as exclusive privilege should be rephrased. “Democratic governments do not have privileges, they have functions,” he said.

He added that all the references to exclusive privilege should be dropped and added as functions under this Act. He stressed that it was outdated drafting which then reflects in certain attitudes present in bureaucrats.

“..it won’t change much but it will be much more reflective of the constitutional grounding of this law, it will improve enforcement in the minds of officers who will exercise functions under it much more formally,” he said.

Will it diminish fundamental liberties?

A speaker said that the provision will hinder consumer choice and compromise their ability to be able to access better services to communicate in a more dynamic way. He offered a hypothetical scenario in which a person uses WhatsApp and Signal both as they serve different needs but if Signal becomes unusable because of the conditions under the telecommunications bill then their ability to communicate with certain categories of people will be compromised.

He added that when disproportionate conditions are created for people to be able to use services then the discussions will be needed from a constitutional perspective as well.

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The logic also extends to video as a company will need to buy a licence in order to stream an event or a discussion which has “the same chilling effect or restriction” on people’s ability to disseminate speech.

Another attendee posed the question whether freedom of press is an “exclusive power of the sovereign”. He said that question comes up in the aftermath of the inclusion of broadcasting service under the bill as a telecommunication service.

He elaborated that the bill can be challenged in court “because if the government is going to hold that it is their exclusive privilege to determine what you are going to talk or how you are going to work or under what terms you’re going to work then we have a serious problem”.

A lawyer in attendance said: “I would imagine that if a challenge does arise, it’ll be a localised challenge based on particular facts. Nobody’s going to say that use of spectrum itself is not a sovereign right, but they might be able to say that particular services being regulated in a particular way would violate free speech.”

Are they too open-ended and broad?

One of the attendees criticised the fact that many provisions in the bill are “open-ended”, including the ones in the licensing framework itself. “…all these provisions are very broadly worded and they don’t lay down the qualifying or disqualifying criteria.

Does the set of provisions make room for a case of excessive delegation because there is no qualifying criteria for the rule-making authority?” she asked.

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Grounds for challenge: Furthermore, another speaker concurred that excessive delegation was a point of concern. “There have to be certain governing principles contained in the law or the section itself. It’s definitely a solid ground for challenge where it is as broad as this (bill) and you can do whatever you feel like,” the speaker noted.

Will it lead to an increase in cost?

A speaker pointed out that a consumer’s interest concerns ease of access, low prices, safe and seamless access to the internet. “I’m yet to understand how the telecom bill solves or incrementally solves consumer concerns,” she said. Another speaker highlighted that licensing leads to an increase in cost for everyone as compliance adds to the cost of operations. He also referred to the example of the IT Rules, 2021, which added cost and a lot of “procedural (and) unnecessary headaches for the news industry. But I don’t see how it helps anyone.”

Is the government acting in bad faith?

A participant observed that the government’s movement from the first draft to later drafts has been in a very particular direction in cases of extremely broad definitions. “For example, there was a broad definition of intermediaries in the IT Act, and the IT rules could not change the definition in the Act but the broad rules that were applied to all intermediaries in early drafts were later scaled down to social media and significant social media intermediaries in later drafts,” he said. “My sense is that officers and departments put a very high price against which people have to bargain and then they get something that is still not very ordinary,” he added.

Outflux of companies: The moderator said that SaaS companies will have to navigate through the bureaucracy in order to operate their business. Many of them are already making a beeline out of India.

Is there no sense in the ‘same service, same rules’ argument?

An attendee said that the argument does not work even if it is true that money is being lost and the internet services are adversely affecting incumbents. “They make little sense in economic regulation and they don’t even make sense in the Indian context where they’re being applied or where they’re being advocated,” he said.

Another participant highlighted that telecom service providers (TSPs) do not realise that applications, especially internet platforms, create demand and therefore a lot of people sign up for better services, which are then monetised by the TSPs.

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Understanding the need to regulate spectrum

An attendee said that the need for regulation for the use of spectrum has been recognised internationally because you need coordination. “Electromagnetic waves cannot be used without coordination. I’m just saying that everything doesn’t necessarily need to be regulated under the telecom ministry or under a telecom act.

Another speaker questioned whether a single regulator can be deemed as the correct regulator if we are distinguishing content and carriage. “Are we talking about fragmentation of the internet in terms of regulatory structures?” she added.

Note: The headline was updated on October 29th, 9:33 AM 

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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Written By

I cover several beats such as Crypto, Telecom, and OTT at MediaNama. I can be found loitering at my local theatre when I am off work consuming movies by the dozen.

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