Draft Indian Telecommunication Bill, 2022 introduced with focus on regulating internet-based services

Draft Indian Telecommunications Bill, 2022: Department of Telecommunications (DoT) recently unveiled the Draft Indian Telecommunications Bill, 2022.

  • It has been presented for feedback from stakeholders by October 20.

Key Points:

  • The government seeks to replace the existing legal framework governing telecommunications in India through this new draft Bill introduced by DoT.
  • This draft Bill goal is to amend and consolidate the existing laws governing the creation, growth, and management of India's telecom networks, infrastructure, and services.
  • The government through the new Bill seeks to merges the Indian Telegraph Act, 1885, the Wireless Telegraphy Act, 1933 and the Telegraph Wires (Unlawful Possession) Act, 1950.
  • The draft bill proposes to include over-the-top (OTT) communication services like WhatsApp, Telegram and Signal satellite-based communication services, internet and broadband services, in-flight and maritime connectivity services,   interpersonal communications services, machine to machine communication services etc., under the definition of telecommunication services.
  • This implies that OTT communication services will be subject to the regulations that telecom operators must go by, which require operators to pay expensive licence and spectrum expenses.
  • Currently, OTT players are providing free services due to the lack of this provision.
  • The draft bill also amends the Telecom Regulatory Authority of India (TRAI) Act to dilute its function to being just recommendatory body.
  • Currently, the DoT is mandated to seek TRAI’s recommendation before issuing a license to a service provider.
  • The Bill also repeals the legal requirement that TRAI ask the government for the data or documents it needs to make this recommendation.
  • The draft bill also suggests that in cases of bankruptcy or insolvency, the Central Government may take ownership of the spectrum allocated to a telecom business.
  • Currently, there are no rules stating whether the central government owns the spectrum controlled by a defaulting operator or if the banks have the right to seize it.
  • Under extraordinary circumstances, such as financial stress, consumer interest, maintaining competition, etc., the draft bill gives the Central Government the authority to defer, convert into equity, write off, or award relief to any licensee.
  • In times of war or national security issues, the government can take over the control and management of, or suspend the operation of, or entrust any authority of the Government to manage any or all of any telecommunication services. The government can also suspend any communication.
  • It also proposes to replace the Universal Service Obligation Fund (USOF) with the Telecommunication Development Fund (TDF).

Note: The USOF is a fund that is created by adding a 5% Universal Service Levy to the adjusted gross revenue of all telecom fund operators.

This fund has been used for providing rural connectivity.

  • The objective of the TDF seeks to expand the scope of USOF to include undeserved urban regions, research and development, skill development etc.

Purpose of this New Draft Bill:

  • The Centre believes that India needs a legal system that is in line with the realities of the twenty-first century, as stated in the explanatory note to the bill that is being called the Indian Telecommunication Bill, 2022.
  • The existing regulatory framework for the telecommunication sector is based on the Indian Telegraph Act, 1885.
  • Since the invention of the "telegraph," telecommunications have changed dramatically in terms of their purpose, their methods, and their technologies. The world has stopped using "telegraph" since 2013.
  • The world is now in the era of new technologies such as 4G and 5G, the Internet of Things, Industry 4.0, M2M Communications, and Mobile Edge Computing.
  • India is the world's second-largest telecommunication ecosystem with 117 crore subscribers,
  • The telecommunication sector employs more than 4 million people and contributes about 8 per cent of the country's GDP.
  • Therefore, the Ministry of Communications initiated a public consultative process to develop a modern and future-ready legal framework.

In July 2022, a Consultation Paper on 'Need for a new legal framework governing Telecommunication in India' was published and comments were invited.