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AIC Says No To ‘Same Service, Same Rules’ In Comments On The Telecom Bill 2022

Asia Internet Coalition (AIC) has asked the government for separate laws for OTT platforms and telecommunication service providers, limit user verification, and more

The Asia Internet Coalition (AIC) has asked the government for separate laws for OTT platforms and telecommunication service providers (TSPs) in its comments on the Draft Indian Telecommunication Bill, 2022. Among other things, the draft proposes a broad definition of ‘telecommunication services’, which includes ‘internet based communication services’. This potentially brings almost anything on the internet under the ambit of regulation. AIC is an industry body whose members include the likes of Google, Meta, Twitter and LinkedIn.

The draft telecom bill was released on September 21, 2022, and public comments were invited, the window for which is open till 10th November. These comments can be sent to naveen.kumar71@gov.in.

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In this article, we’ll look at some significant comments and recommendations submitted by the AIC to the Department of Communication. To read the full text submitted by the AIC, click here.

Concerns raised by Asia Internet Coalition

At the outset, AIC’s Managing Director Jeff Paine wrote a letter highlighting concerns about the bill:

  1. Separate law for OTT services: “…telecommunication services are not similar and should ideally be regulated under separate frameworks altogether (such as information technology laws for OTT services, and telecom laws for telecommunication services),” said Paine. “Unlike OTT service providers, telecom service providers (TSPs) have the right to lease spectrum from the Government, obtain numbering resources, interconnect with the Public Switched Telephone Network (PSTN) and set up ‘right of way’,” he added.
  2. Draft bill contrary to the vision of safe and open internet: Paine said that the OTT industry is reliant on innovation and flexibility to provide its services, and to become economically viable. He said the draft bill is “contrary to the Govt’s vision of a safe, open, trusted internet for all. A less competitive internet trends towards a less open internet. There’s a risk that some regulatory interventions will undermine competition and entrench incumbent services, reducing consumer choice”.
  3. Draft bill affects “ease of doing business”: “Subjecting OTT service providers to a licensing regime may also lead to the imposition of unwarranted Governmental oversight vis-à-vis their operations (such as in the form of stringent licence terms and conditions),” Paine said. He also said that AIC believes such regulations can lead to a scenario where users are not able to “openly and freely use OTT services as a medium of expression, and thus undermine their fundamental right to free speech and expression”.
  4. OTT services may become expensive: “We strongly recommend that OTT service providers be kept out of the ambit of the potential licensing framework as license and entry fee burdens on OTT service providers are likely to act as economic disincentives and result in services becoming more expensive for users.”

Recommendations and reasoning

Next, we look at the major recommendations submitted by the AIC and the reasoning given by them in their submission.

  1. Need a clear transition period: “…the DOT ought to consider providing a reasonable and clear transition period in the text of the Draft Bill, which also accounts for the time that different entities may require to comply with the provisions.”
    Reasoning: The draft bill “does not explicitly mention a transition period during which the entities that it seeks to regulate may comply with the obligations under it”. This may have an adverse impact on businesses (especially the new entities sought to be covered by the bill), as several entities will not be able to plan compliance obligations and investment requirements.
  2. Change the definition of ‘messages’: The definition of ‘message’ should exclude data-based messages/platforms offered by businesses, and any in-app notifications/messages provided to users by businesses within the application. Also, the provisions that mandate prior consent for commercial communication should exclude “push messages and notifications of new features and pop-ups that are incidental to OTT communication services”.
    Reasoning: “Since ‘telecommunication’ is defined to include ‘any messages’, it will cover the reception of any message on any electromagnetic system—services such as video calls, emails, and interpersonal messages could also be impacted.
  3. Separate telecom and internet infrastructure services: “…it is suggested that the draft definition be amended to specifically define the services accurately or carve out a distinction for internet infrastructure services.”
    Reasoning: The definition of ‘telecommunications’ does not distinguish between telecom and internet infrastructure services. Since messaging services are already under the ambit of the IT rules 2021, any additional licensing oversight will negatively impact the ease of doing business.
  4. No to ‘same service, same rules’: Services offered by OTT service providers and traditional TSPs are fundamentally different and cannot be regulated under the principle of ‘same service, same rules’.
    Reasoning: The TSPs and OTTs operate in different layers. The TSPs operate over the network layer whereas OTT service providers operate over the application layer. They have different functionalities and compete for different customers.
    • TSPs, not OTTs control telecom infrastructure: “Where TSPs operate in the market that controls and operates the critical infrastructure for providing telecommunication services, OTT service providers operate in a market that enables them to offer applications that the public accesses for the exchange of content over the public internet (which is, again, operated by TSPs).”
    • OTTs cannot be used without TSPs’ services: “OTT services cannot be used without the services of TSPs, whereas telecommunication services can be used without depending on OTT services. “The purpose for providing internet connectivity as a service is to facilitate the provision of other services through the internet, and the provision of such services by OTT service providers is a legitimate use of internet services. To that extent, TSPs are gatekeepers to the internet (for both OTT service providers and users) and are crucial for the operation of OTT services and in enabling user access to the same.
  5. Revisit and restrict this definition: The definition of ‘telecommunications’ should be revisited and restricted to reduce its broad coverage.
    Reasoning: The definition of ‘telecommunications’ is very broad and does not distinguish between telecom infrastructure services and internet infrastructure services, which are actually different.
  6. Removal of terms: Terms such as ” ‘internet based communication services’, ‘OTT communication services’, ‘interpersonal communication services’, ‘data communication services’, ‘electronic mail’ etc. should be removed from the definition of ‘telecommunication services’ before the enactment of the Draft Bill.
    Reasoning: These terms have several problems:
    • Certain terms have overlapping meanings: Terms such as ‘internet based communication services’ may include any sort of communication service happening over the internet, which would overlap with OTT services, which are also a part of the definition of ‘telecom services’. Moreover, ‘Interpersonal communication services’ and ‘OTT communication services’ are not explained in the Indian laws.
    • Lack of definitive meaning: “While ‘internet-based communication services’ is a commonly used term, it does not find any explicit reference in Indian or foreign law. Thus, without a distinct definition under the Draft Bill, entities may potentially be unable to determine if their service is an ‘internet-based communication service’.”
    • Problem with segregating terms: The “Draft Bill also does not provide any specific method to differentiate between OTT communication services and other OTT services, which further contributes to the uncertainty around the terms.” An example of the problem: It’s hard to differentiate between communication and non-communication OTT apps, for instance, Uber also provides the ability to speak to the driver but it is primarily a ride-hailing app. Moreover, creating different regulations for communication and non-communication will lead to the creation of an “uneven playing field between services using the same medium to provide their service”.
  7. Restrict government’s powers: “The broad powers of the Central Government to notify any other services as ‘telecommunication services’ must also be restricted.” If there is any need to revise these definitions in the future, it must be done following detailed stakeholder consultations. “…the distinction between spectrum controlling and spectrum utilising entities should continue to be maintained.” Countries “like Argentina, Chile, Israel, South Korea, Thailand have not adopted any formal regulatory framework for OTT services, to promote innovation.”
  8. Problem with the definition of ‘user’: “…it is our submission that the DOT may consider limiting the scope of ‘user’ to those persons who avail a telecommunication service for a consideration.”
    Reasoning: This recommendation is similar to the Consumer Protection Act, 2019 (CPA), which defines a ‘customer’ as a person who hires or avails of any service for a consideration. Moreover, the definition of ‘service’ under the CPA includes ‘telecom’ in its ambit and excludes “the rendering of services free of charge”.
  9. Restrict user verification: The “verification of user identity should be restricted to pure communication/connectivity services.
    Reasoning: The requirement to “unequivocally identify” users leads to privacy concerns as a large amount of personal data will have to be collected and stored by regulated entities. “The clause contradicts principles of data minimization as service providers will have to collect additional users’ data to comply with this provision. Moreover, “It would not be feasible to implement verification processes especially for communication services through emails and pure-play video conference applications”.
  10. Exemption from interception and introduction of safeguards: “…it is our submission that the DOT may consider providing an exemption under Clause 24 and 25 of the Draft Bill for entities operating in the application layer as they are already covered under the IT Act framework. Further, we also submit that the DOT may introduce safeguards and oversight mechanisms in line with existing mechanisms under IT Act and current telecom laws to tackle misuse.”
    Reasoning: The draft allows the Central Government, State government (in certain cases) and authorised officers to intercept, detain or suspend communications in events such as a public emergency, public safety, etc. It also gives them the ability to take “temporary possession of telecommunication services, telecommunication network, etc. and to issue relevant directions”. This provision can be legally challenged as well.
    Legal challenges: “…the risk of such interception provisions under the Draft Bill being subjected to review before court of law and potentially struck down cannot be ruled out.” In Shreya Singhal vs Union of India case, the SC highlighted “the significance of a reasoned blocking order under Section 69A of the IT Act, which is subject to procedural safeguards (including providing a hearing to the originator and intermediary).” Moreover, such provisions are also likely to be subjected to judicial review against the privacy principles set out in Puttaswamy vs Union of India. “In fact, it is settled law that Governmental surveillance measures must meet the three-fold requirement of (i) legality, i.e., the action must be sanctioned by law; (ii) need, i.e., the proposed action must be necessary in a democratic society for a legitimate aim; and (iii) proportionality, i.e., the extent of such interference must be proportionate to the need for interference.”
  11. Focus on privacy rights: Government surveillance should be balanced against the privacy rights of individuals. 
    Provisions for lawful interception and monitoring are already present in the IT Act. “We do not see any logical justification in bringing forth an additional set of lawful interception and monitoring provisions applicable to OTT service providers.”
  12. Safeguards against internet suspension needed: At the very least, a minimum defined time period should be prescribed for government surveillance and possession of telecom services.
    The provisions allowing the government to suspend telecom services “are also bereft of any procedural or other safeguards. Accordingly, it is recommended safeguards are put in place to ensure no arbitrary suspensions are ordered.”
  13. OTT encryption should continue as it is; need clarity on the UL framework: “It is our submission that the DOT may consider enabling OTT services to retain their encryption features on an ‘as is’ basis and without any dilution.”
    Reasoning: The existing Unified License (UL) framework prohibits licensees from employing bulk encryption equipment in their networks. The draft bill does not provide clarity on if the terms under the UL framework will also apply to OTT service providers. Moreover, “requiring OTT service providers to break encryption, for example, to enable interception is likely to weaken the security measures deployed by them, and in turn worsen the problem the Government is trying to address—i.e., tackling cybercrime.” Such provisions “essentially strip away the user’s right to stay anonymous and puts an obligation on service providers to identify, with complete assurity, every user. Such a broad and excessive requirement, in the absence of a data protection law, fails to prioritize user safety and security, and should accordingly be removed.”

The story was updated on 5th November 2022 (5:18 pm) to enhance structuring and clarity. 

Update: We corrected ‘Asia Internet Collective’ to ‘Asia Internet Coalition’ on November 7th 2022, 9:20 AM

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I cover privacy, surveillance and tech policy. In my reporting, I try my best to present the most relevant facts, and sometimes add in a pinch of my thoughts.

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