Telecom Main

How the Telecom Act undermines personal liberties

Rajat Kathuria and Isha Suri — 2024-02-20T00:54:29Z

In this article, Prof. Rajat Kathuria and Isha Suri analyse whether the law has enough safeguards and an independent regulatory architecture to protect the rights of citizens. The authors posit that the current version leaves the door open for an overenthusiastic enforcement machinery to suppress fundamental rights without any meaningful checks and balances.

The Telecommunications Act cements government’s power to suspend internet services, does not establish independent oversight mechanism for interception, suspension orders. The article originally published in the Indian Express can be read here.

“Is Big Brother watching you? At the press of a button a civil servant can inspect just about every detail of your life your tax, your medical record and periods of unemployment. That civil servant could be your neighbour. There is mounting concern over this powerful weapon that the computer revolution has put in the government’s hand. But no civil servant will be allowed to examine personal files from another department, without written authority from a Minister. I shall be announcing legislation enabling citizens to take action against any civil servant who gains unauthorised access to his file.” (Yes Minister). The year is 1980, the computer revolution is just about beginning and questions of surveillance have become pertinent; safeguards in the form of separation of powers between the executive and legislative are announced by the Minister for the protection of citizens.

Although theatrical, Yes Minister can yet be invoked to characterise governments in most parliamentary democracies especially India’s.

More than four decades on, the Indian Parliament witnessed the smooth passage of several pieces of legislation, including the Telecommunications Act (TA) 2023, which justifiably seeks to bury remnants of colonial-era laws. While the modern digital age creates conditions for unprecedented surveillance reflecting the Benthamite tenet of maximum monitoring at minimum cost, the question on everyone’s minds is whether the law has enough safeguards and an independent regulatory architecture to protect the rights of citizens.

Before contemplating this weighty query, let us set the narrative in context with a quick recap of the major markers in digital governance in India that have concluded, at least for the moment, in the passing of TA 2023.

The institutional regime for telecommunications dates back to the late 1990s and was created more by accident and less by design. The Telecom Regulatory Authority of India (TRAI) became necessary because private sector investment came in when the public sector operator was both player and referee. Massive litigation followed, leading to the setting up of TRAI. Within a few years, the Telecom Dispute Settlement Appellate Tribunal (TDSAT) was carved from TRAI to fast-track excessive litigation. In between, there was the dissolution of the first TRAI, only confirming who the “boss” was.

The desire to serve in regulatory regimes has surely been tainted by the goal of securing sinecures. This is not just an Indian phenomenon. For example, the Biden administrators wish they continue in office for long. It is in the nature of such positions that many of those appointed will never again be in a position of authority. There have been few instances after its dissolution that TRAI has taken on the government. The relationship between the legislature and the executive is complex but suffice it to say that such a separation in telecom is met much more in the breach.

The regulatory regime for telecom described above notifies subordinate legislation, enforces and adjudicates disputes — it performs the role of the executive and the adjudicator. One key safeguard for the protection of ordinary citizens is, therefore, already undermined. The separation of powers remains on paper and the exercise of authority through delegated rule-making ensures the government can intervene with little resistance.

In this background, TA 2023 poses challenges. Although undoing colonial-era laws is one of the stated goals, the re-purposing of some existing provisions and ambiguous drafting does little justice to that aim. For example, the definition of telecommunication services has been left open to interpretation. Internet-based services like WhatsApp and Gmail are, therefore, likely to fall under the Act’s ambit. Provisions empowering the government to notify standards and conformity measures or ask for alternatives to end-to-end encryption such as client-side scanning could undermine privacy. Further requiring messages to be disclosed in an “intelligible format” is irreconcilable with end-to-end privacy engineering. Tinkering with end-to-end encryption for compliance could create potential points of vulnerability.

The grounds on which such information may be sought, outlined in Section 20 (2) include sovereignty and integrity of India, security of the state and public order. Prima facie these appear reasonable. However, the current phrasing leaves room for expansive interpretation by overenthusiastic enforcement machinery — it could go beyond the letter of the law to please political masters. Research conducted in 2021 by Vrinda Bhandari and others found that many orders issued under the guise of public order restrictions would not qualify as legal per se. The Act cements the government’s power to suspend internet services (Section 20(2)(b)) and does not include procedural safeguards envisaged in the Supreme Court’s Anuradha Bhasin judgment such as the proportionality test, exploration of suitable alternatives and the adoption of least intrusive measures.

The Act also does not establish an independent oversight mechanism for interception and suspension orders related to telecommunications. These rules, framed in 1996 in line with the directions of the Supreme Court in PUCL v. Union of India and requiring a committee consisting exclusively of senior government officials, reflect inadequate separation. In the UK the law mandates approval of interception warrants by judicial commissioners. Separation of powers is however not a panacea; it is just a necessary condition for the effective functioning of institutions. We must also observe the counsel of John Stuart Mill for the maintenance of institutional integrity namely, not “to lay [their] liberties at the feet of even a great man, or to trust him with powers which enable him to subvert [their] institutions” — JS Mill, quoted by BR Ambedkar on November 25 1949, requoted by sitting Chief Justice of India on Constitution Day (November 26, 2018).

Kathuria is Dean, School of Humanities and Social Sciences and Professor of Economics at the Shiv Nadar Institution of Eminence and Suri is Research Lead, CIS.

For more details visit https://cis-india.org/telecom/blog/indian-express-january-25-2024-how-the-telecom-act-undermines-personal-liberties

Comments to the Telecommunications Bill, 2023

Isha Suri, Nishant Shankar, Shweta Mohandas, and Vipul Kharbanda — 2024-01-06T01:21:55Z

The Parliament has passed the Telecommunications Bill, 2023 which seeks to replace the Indian Telegraph Act, 1885. The Centre for Internet & Society (CIS) submits its comments to the bill.

The comments were reviewed by Tanveer Hasan. Click to download the PDF

Key concerns

Definition of Telecommunication Service

The definition of the terms telecommunication (section 2(p) and telecommunication service (section 2(t)) is extremely broad and would effectively include transmission of any signal by any electromagnetic systems. This wide definition increases the scope of the Bill to include almost all kinds of means of communication used in modern times including messaging services, email, OTT services, among others. Even if one were to accept the argument that the scope of the Bill has been deliberately kept wide so that the government has the power to regulate all means of telecommunication in order to prevent mischief and illegal activities, the problem arises with the onerous language of section 3(1) which makes it compulsory to obtain an authorisation from the Central Government for any and all telecommunication services, unless specifically exempted under section 3(3).

In simpler words the Bill not only seeks to regulate all communication services, but requires government permission to provide such services in the first place. Such an approach has the very likely potential to hamper future telecom innovation especially in light of the fact that the penalty for not obtaining permission is imprisonment upto 3 years as well as fine of upto Rs. 2 crores.

Such a wide definition leads to ambiguity and lack of regulatory certainty to businesses as well as users participating in the ecosystem. This proposal triggers immediate concerns, particularly a confusing definition of telecommunication services which may also incorporate the provision of a broad range of digital and online services. Such a wide definition could lead to confusion and arbitrary implementation on one hand, and if made applicable to the content layer of the internet architecture stifle innovation in the digital ecosystem due to onerous licensing/registration requirements on the other hand. It is also pertinent to note that some of the internet-based services listed in the definition in 2(21) are already regulated under the Information Technology (IT) Act 2000. For example, the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 regulates intermediaries, including the significant social media intermediaries (SSMI) such as Facebook and Twitter. Putting an additional regulatory burden on these service layer companies will hamper innovation and competitiveness of the sector and also amount to regulatory overreach.

Power of authorisation and assignment

Section 3 (7) - Any authorised entity which provides such telecommunication services as may be notified by the Central Government, shall identify the person to whom it provides telecommunication services through use of any verifiable biometric based identification as may be prescribed.

All services do not require a biometric based identification of the person. While there is a legitimate need to verify a person in the case of financial transactions, however a similar level of scrutiny is not warranted for applications that a person might use once, or applications that do not pose a threat. For example the need to verify a person through Know Your Customer (KYC) or otherwise for an application to order food, or an application which is meant for communication can be excessive regulation. In addition to the enhanced burden of collecting and storing this data that will come on the telecommunication service, there will also be the added requirement to maintain strict data protection and security measures under the Digital Personal Data Protection Act 2023. Furthermore, as has been seen in multiple instances of data breaches and cyber security attacks such as the one at AIIMS^{^[1]}, Justpay^{^[2]} demonstrate that both public and private organisations can be affected by cyber attacks. It is therefore advisable to reduce the number of entities that store and collect sensitive personal data such as biometric information in the interest of privacy as well as national security.

The Supreme Court while looking at the constitutionality of the Aadhaar Act upheld the need for banking and financial institutions to require an individual’s Aadhaar number stating the legitimate aim of preventing money laundering; however, the Court struck down the provision that required any private entity to collect Aadhaar details. Justice Bhushan held that the collection by private entities violated the right to privacy, by failing the first prong of the test laid down in Puttaswamy judgement, the test of legality.^{^[3]}

More importantly, through the requirement of ‘verifiable biometric based identification’, the Bill is likely to nudge telecom service providers to incorporate Aadhar Based identification, even though the Indian Supreme Court in 2018 held that the mandatory linking of mobile connections with biometric identification is unlawful.

Standards, Public Safety, National Security and Protection of Telecommunication Networks

Power to notify standards

Section 19 (f) The power to notify standards and conformity measures on encryption is a sweeping power that allows the central government to potentially request for backdoors on encryption, or ask for alternatives to end to end encryption such as client side scanning, which have been critiqued^{^[4]} as measures that undermine privacy for all users. If the objective is to provide recommendations for certain encryption techniques when dealing with sensitive government data, a more specific compliance certification can be issued to such firms. For example, the United States government mandates certain government agencies to comply with the Federal Information Processing Standards (FIPS)^{^[5]} which also apply to non-government firms holding government contracts. Standards like FIPS recommend specific cryptographic modules to ensure secure communication of sensitive data. Such conditions and cases must be explicitly scoped in defining the standard setting powers of government with regard to encryption, in consultation with the industry and civil society organisations.

Provisions for public emergency or public safety

Section 20(2) (a) - Messaging apps such as WhatsApp and Signal enable end to end encryption, where messages are encrypted on endpoints such as user devices. Service providers and intermediaries cannot decrypt messages. Requiring messages to be amenable to disclosure in an 'intelligible format' is technically impossible within the end to end paradigm of privacy engineering^{^[6]}. Technical means of disclosing the contents of messages can either reside on a user’s device, in a middle-box that mediates communication, or on servers where some computation can occur. Restructuring end-to-end encrypted communication networks to facilitate these technical means of disclosure would result in the creation of potential points of vulnerability and encryption backdoors. These vulnerabilities can be exploited by malicious actors and backdoors act as ‘intentional vulnerabilities’^{^[7]} that can be used for excessive surveillance of communication that users believe to be private.

Section 20 (2) states the grounds for which such information may be sought. These include sovereignty and integrity of India, defence and security of the State, friendly relations with foreign States, and public order. Prima facie, these may appear to be reasonable grounds for facilitating government access, however, the current phrasing is too wide and leaves room for an expansive interpretation. This is particularly true for maintenance of “public order” that is routinely invoked in a variety of situations.^{^[8]} According to research conducted in 2021 by Vrinda Bhandari and others on the “Use and Misuse of Section 144 found orders issued under the guise of public order restrictions to regulate a variety of activities, many of which would not qualify as illegal activities per se. For instance, orders were issued to prohibit flying of hot air balloons, unmanned aerial vehicles, unmanned aircraft systems, use of “special” or “metallic” manjhas to fly kites and carrying tiffin boxes inside cinemas.^{^[9]} And tracing encrypted messages to thwart such perceived public order threats would be excessive and disproportionate. The order to intercept, detain, disclose or suspend a communication made between private individuals, acts as a violation of privacy and provides extensive grounds to surveil people.^{^[10]}

These grounds may be used to intercept or monitor all communication where a particular word or set of words is used. And its implementation would require communication of all users to be monitored effectively leading to a lower degree of privacy for all users^{^[11]} - including internet communication based apps due to definitional ambiguity. The Supreme Court has held that any infringement of the right to privacy should be proportionate to the need for such interference.^{^[12]} The judgement in the Puttaswamy case provides some guidance to assess the limits and scope of the constitutional right to privacy in the form of the three prong test. The test requires the existence of a law, a legitimate state interest and the restriction (to privacy) should be ‘proportionate'. This provision violates a user’s fundamental right to privacy since it fails to meet the proportionality requirement as laid down by the Supreme Court.

Section 20 (2) (b) provides for suspension of telecommunication service or class of services on similar grounds. The Bill empowers the DoT to suspend telecommunication services and if applicable to internet based communication services such as WhatsApp, Signal, among others without the need for any judicial oversight or procedural safeguards as enunciated by the Supreme Court in Anuradha Bhasin vs Union Of India. The provision must incorporate an independent oversight mechanism for such orders and also incorporate safeguards laid down by the Supreme Court in the Anuradha Bhasin judgement^{^[13]} to prevent arbitrary, frequent, and prolonged suspension of telecommunication services in India.

Protection of users

Measures for protection of users

Section 28 - This section should also provide mechanisms for de-registering from “specific messages” . While this section mentions the need for prior consent of users for receiving the specified messages/ class of specified messages, it should look at the full spectrum of rights the Digital Personal Data Protection Act 2023 provides, which includes the right to withdraw consent. Hence we suggest that Section 28(3) adds that the authorised entity providing telecommunication services shall establish an online mechanism for withdrawal of consent, in addition to grievance redressal.

Duty of users

Section 29 - While listing out the duties of the users the Act puts the onus on the user to furnish correct information. It fails to take into account instances where the information is fed into the system by third parties, due to issues of access and literacy on the part of the users. While the section heading states “duty of the user” the preceding text “no user shall” has the potential to penalise users for acts carried out without a malicious intent. Additionally, there is also a need to look at how notices and terms and conditions of most telecommunication services are primarily in English, making it even more difficult for a large number of Indian users to read and hence understand the requirements. Furthermore, the associated penalty for failing to comply with these provisions are, i.e. up to INR 25,000 for the first offence and for the second or subsequent offences, up to INR 50,000 for every day till the contravention continues. Considering the low digital literacy rates, the government would be well advised to reconsider imposition of such hefty fines.

If applicable on internet based services, this will also impact the ability of a user to retain anonymity over the internet. Individuals may choose to remain anonymous online for a number of reasons. It is important to understand that an individual may remain anonymous for a variety of legitimate purposes such as expressing opinions about their employers and whistleblowers, providing anonymous tips to newspapers or law enforcement, expressing political opinions and criticism that may be subject to persecution, or simply someone saying something that they may be embarrassed about. ^{^[14]} In India, in particular, an individual’s caste can be identified from their name, and they may choose to remain anonymous or adopt a pseudonym to escape centuries of stigma and discrimination that their communities have faced. The broad definition of telecommunication services as elaborated above places restrictions on anonymity online and severely degrades an individual’s ability to exercise their fundamental right to freedom of expression.

^{^[1]}Business Today Desk, “Cyber attack at AIIMS Delhi: Hackers demand Rs 200 cr in crypto, says report” Business Today, 22 November 2022, https://www.businesstoday.in/latest/in-focus/story/cyber-attack-at-aiims-delhi-hackers-demand-rs-200-cr-in-crypto-says-report-354475-2022-11-28.

^{^[2]}Ashwin Manikandan, Anandi Chandrashekhar, “Juspay Data Leak fallout: RBI swings into action to curb cyberattacks”, The Economic Times, 6 January 2021, https://economictimes.indiatimes.com/tech/technology/juspay-data-leak-fallout-rbi-swings-into-action-to-curb-cyberattacks/articleshow/80125430.cms

^{^[3]} “Judgement in Plain English Constitutionality of Aadhaar Act”, “Supreme Court Observer, accessed 22 December 2023,https://www.scobserver.in/reports/constitutionality-of-aadhaar-justice-k-s-puttaswamy-union-of-india-judgment-in-plain-english/

^{^[4]} “Why Adding Client-Side Scanning Breaks End-To-End Encryption”, The Electronic Freedom Foundation, accessed 22 December 2023, https://www.eff.org/deeplinks/2019/11/why-adding-client-side-scanning-breaks-end-end-encryption.

^{^[5]} “Compliance FAQs: Federal Information Processing Standards (FIPS)”, NIST, accessed December 22 2023. https://www.nist.gov/standardsgov/compliance-faqs-federal-information-processing-standards-fips

^{^[6]} “Personal Data in the Cloud Is Under Siege. End-to-End Encryption Is Our Most Powerful Defense.”, Lawfare, accessed 22 December 2023, https://www.lawfaremedia.org/article/personal-data-in-the-cloud-is-under-siege.-end-to-end-encryption-is-our-most-powerful-defense

^{^[7]} “Breaking Encryption Myths”, Global Encryption Coalition, accessed 22 December 2023, https://www.globalencryption.org/2020/11/breaking-encryption-myths/

^{^[8]} Smriti Parsheera “Political misinformation is a problem. But asking WhatsApp to risk user privacy is the wrong solution”, The Indian Express, October 28 202 https://indianexpress.com/article/opinion/editorials/remedy-worse-than-malaise-9002600/.

^{^[9]} Vrinda Bhandari, et al, The Use and Misuse of Section 144 Cr.P.C, https://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID4404496_code2801004.pdf?abstractid=4389147&mirid=1&type=2

^{^[10]}CIS’ Comments to the (Draft) Indian Telecommunication Bill 2022 “Centre for Internet and Society, accessed 22 December 2023 https://cis-india.org/telecom/blog/cis-comments-to-draft-indian-telecom-bill-2022#:~:text=Comment%3A%20The%20draft%20bill%20attempts,power%20over%20the%20local%20government.

^{^[11]} The Telecommunications Bill, 2023, PRS Legislative Research, accessed 22 December 2023, https://prsindia.org/billtrack/the-telecommunication-bill-2023

^{^[12]} Justice K.S. Puttaswamy (Retd) vs Union of India, W.P.(Civil) No 494 of 2012, Supreme Court of India, September 26, 2018.

^{^[13]} Writ Petition (Civil) NO. 1031 OF 2019, accessed 22 Decmber 2023, https://main.sci.gov.in/supremecourt/2019/28817/28817_2019_2_1501_19350_Judgement_10-Jan-2020.pdf.

^{^[14]}Palme, Jacob, and Mikael Berglund. "Anonymity on the Internet." Accessed 22 December 2023: 2009.

For more details visit https://cis-india.org/telecom/blog/cis-comments-to-the-telecommunications-bill-2023

CIS’ Comments to the (Draft) Indian Telecommunication Bill 2022

Abhishek Raj, Divyank Katira, Isha Suri, Shweta Mohandas, and Vipul Kharbanda — 2022-11-22T13:22:24Z

The Department of Telecommunications, Government of India invited comments on the Draft Indian Telecommunication Bill, 2022. The Centre for Internet & Society (CIS) submitted its comments.

Reviewed by Pallavi Bedi

Preliminary

The Centre for Internet and Society (CIS) is a non-profit organization that undertakes interdisciplinary research on the internet and digital technologies from policy and academic perspectives. Through its diverse initiatives, CIS explores, intervenes in, and advances contemporary discourse and practices around the internet, technology, and society in India, and elsewhere. Over the last decade, CIS has worked extensively on policy issues related to telecommunication, internet access, digital inclusion, and so on.

In the past, CIS has responded to various public consultations pertaining to telecommunication such as the Telecom Regulatory Authority of India (TRAI) consultation on 5G Auctions^{^[1]}, TRAI consultation on regulation of over-the-top (OTT) services^{^[2]}, to name a few .

We appreciate the efforts of the Department of Telecommunications (DoT) for having consultation on the “Draft Indian Telecommunication Bill 2022”. We are grateful for the opportunity to put forth our views and comments to the draft bill.

Summary of Recommendations

At the outset, we recommend that in the interest of transparency and accountability, prior to enacting important legislations like the Telecom Bill, the government would be well-advised to conduct an “impact assessment” exercise such as “regulatory impact assessment” and put the report in public as practised in jurisdictions such as the European Union.^{^[3]} We would also recommend the government to disclose responses and submissions that it receives during the process to ensure a transparent and consultative process of policymaking.

We recommend that the scope of the bill should be reconsidered and internet-based services should be removed from the definition of telecommunication services. From this definition read with other clauses of the bill, it appears that the bill tries to licence (or control !) not just telecommunication but all kinds of communication and internet-based services. Putting onerous regulatory requirements on every bit and byte flowing through the internet is unnecessary and regulatory overreach.

The draft bill’s attempt to provide for a non-discriminatory and an affordable Right-of-way (RoW) regime is appreciable. However, the central government has been given an overriding power over the local government which has constitutional powers with regard to permissions in their jurisdiction. The bill must clarify the modalities to ensure coordination between centre, state, and local authorities.

We recommend that clause 46 of the draft bill which significantly dilutes TRAI’s power should be deleted. Moreover, the government must work towards further strengthening TRAI by hiring subject matter experts to ensure that India has a powerful sector regulator which is well prepared to usher in the next wave of innovation.

We recommend that the Bill be inline with the Puttaswamy Judgement, and that of Anuradha Bhasin vs Union of India. The Bill, while paying close attention to the protection of users and duty of the user, fails to uphold rights of the user such as the right to privacy and the freedom of speech and expression.

As per clause 29, the objectives for which Telecommunication Development Fund (TDF) can be utilised is broad and therefore the government would be well-advised to specify that TDF can only be utilised to ensure digital access, adoption and usage for digitally marginalised groups. Furthermore, TDF must be ring fenced and not credited to the Consolidated Fund of India to ensure timely implementation which has thus far remained a significant challenge with the universal funds (USOF) regime.

The bill does not have any provisions upholding the principles of net neutrality. The government must act on TRAI’s recommendations and set up the multistakeholder body to check adherence to net neutrality requirements by incorporating provisions to that effect.

In the interest of transparency and accountability, a clause requiring the government to report (quarterly or annually) vital statistics relating to the functioning and financial aspects of matters contained within the draft legislation. The reporting should also include the number of licences provided, licences revoked, number of blocking and suspension orders passed among others.

Detailed Response

Preamble

No comments

Chapter 1: Short Title, Extent and Commencement

No comments

Chapter 2: Definitions

➔ 2(9): “message” means any sign, signal, writing, image, sound, video, data stream or intelligence or information intended for telecommunication.

Comment: The terms “intelligence” and “data stream” are not clear in the definition and these terms have not been defined elsewhere in the bill. Moreover, the definition of message is broad and may have implications with regard to surveillance and privacy of users, when read with clause 4(8) and clause 24(2)(a).

Recommendation: We recommend that the terms “intelligence” and “data stream” are defined under the bill, in order to reduce chances of excessive surveillance and to maintain the informational privacy of the individual. Additionally the definition could have an expansive list of what could constitute a message in order to prevent mission creep.

➔ 2(18): “telecommunication equipment” means any equipment, appliance, instrument, device, material or apparatus, including customer equipment, that can be or is being used for telecommunication, and includes software integral to such telecommunication equipment;”

Comment: The inclusion of customer equipment in the definition of telecommunication equipment has implications. The definition of the “customer equipment”^{^[4]} as provided in clause 2(5) of the Bill is broad enough to include personal devices such as phones, routers, among others. As per clauses 23 to 26 the Central Government has wide ranging powers with respect to telecommunications equipment and telecommunications networks such as issuing various directions for telecommunications networks and even has the power to take over such networks. As the definitions currently stand, these provisions would automatically become applicable to customer equipment as well which may be a violation of the right to privacy of the citizens of the country.

Moreover, according to 3(2)(c), possession of wireless equipment requires authorization. On reading 3(2)(c) with the definitions of wireless equipment in 2(23) and customer equipment in 2(5), an argument could be framed that the customer equipment could technically also require a licence, and so would the software integral to such equipment. If customer equipment is in fact included in telecom equipment and software integral to it is also included therein, then arguably even Android OS or other OS can be licensable.

Recommendation: Thus, we suggest that the government should remove customer equipment from the definition of telecommunication equipment.

➔ 2(21): “telecommunication services" means service of any description (including broadcasting services, electronic mail, voice mail, voice, video and data communication services, audiotex services, videotex services, fixed and mobile services, internet and broadband services, satellite based communication services, internet based communication services, in-flight and maritime connectivity services, interpersonal communications services, machine to machine communication services, over-the-top (OTT) communication services) which is made available to users by telecommunication, and includes any other service that the Central Government may notify to be telecommunication services;”

Comment: Clause 2(21) expands the scope of “telecommunication services” significantly. The overly-broad definition of “telecommunication services”, and what constitutes a “message”^{^[5]}, brings within its ambit a host of internet services including but not limited to email, instant messaging, social media services, and even payments and e-commerce transactions. Neither the bill, nor the accompanying explanatory note provides a satisfactory rationale for an all-encompassing definition of “telecommunication services”. The explanatory note attached to the bill suggests that legislations in Australia, EU, UK, Singapore, Japan, and USA have been examined while drafting this bill. However, our research^{^[6]} suggests that none of these jurisdictions define “telecommunication services” so expansively and seek to regulate entities offering only internet based services companies through licensing, in particular. It may also be worthwhile to note that TRAI recommended against such an approach and also clarified that there is no issue of financial arbitrage.^{^[7]} However, the bill attempts to bring OTT communication services within the purview of licensing. From this definition read with other clauses of the bill, it appears that the bill tries to licence (or control !) not just telecommunication but all kinds of communication and internet-based services. Putting onerous regulatory requirements on every bit and byte flowing through the internet is unnecessary and regulatory overreach. There can be major implications of expanding the definition of telecommunication services, some of which are listed below:

● The draft bill has stringent provisions on surveillance and shutdowns [clause 23 to clause 28]. These clauses would be naturally applicable to the expanded bucket of telecommunication services. This has serious implications on user’s right to privacy and freedom of expression online. For example, the bill gives the government the power to surveil citizens over apps such as WhatsApp, Telegram, to name a few, and even email. [some of this will be delved into greater detail in the foregoing sections]

● Some of the internet-based services listed in the definition in 2(21) are already regulated under the Information Technology (IT) Act 2000. For example, the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 regulates intermediaries, including the significant social media intermediaries (SSMI) such as Facebook and Twitter. Putting an additional regulatory burden on these service layer companies in the form of licensing, as envisaged in clause 3 and clause 4 of the bill would hamper the innovation in the sector. Furthermore, it has been observed that the compliance burden of regulations is higher on small businesses in cases where regulations impose identical requirements on entities regardless of the firm size.^{^[8]} Therefore, inserting such a requirement would have a detrimental impact on innovation because excessive compliance requirements would act as a significant entry barrier for smaller firms.

Moreover, there is significant overlap between various services that are mentioned in the definition of telecommunication services which may lead to significant challenges. As these services are not defined elsewhere in the bill, it leaves scope for ambiguity. The bill makes a mention of “over-the-top (OTT) communication services” without defining it. We argue that making a distinction between communication and non-communication OTT services is superficial and does not take into account today’s realities where categorising applications into different categories is extremely difficult. A majority of the OTT applications such as e-commerce, healthcare, food delivery, payments, and so on, provide integrated communication channels. Disaggregation and making an artificial distinction of such apps into communication (with licensing requirements) and non-communication (without licensing requirements) would result in fragmentation of the internet which is definitely not a desirable outcome.

The “same-service same-rules” argument put forth by Telecommunication Service Providers (TSPs/ telcos) for the regulation of OTT apps which provide communication services [generally referred to as OTT communication services] at par with them is flawed for the reasons elaborated herein below:

● It is well recognized that there are significant differences at the technical and architectural level between TSPs and OTT apps which provide communication services . Regulating OTT apps which provide communication services at par with TSPs just on the basis of functionality without considering the inherent technical and architectural differences between them is a definite recipe for failure.

● Moreover, even at the functional level, OTT communication apps offer several additional features which are not available in the traditional TSP services.^{^[9]} Due to this, establishing functional equivalence between TSP’s services and OTT communication services is not only technically unfeasible but also unnecessary since those apps are better regulated by MEITY.

● Furthermore, TSPs enjoy privileges which OTTs don't. For example, TSPs have exclusive rights to spectrum, right of Way (RoW), numbering resources, to name a few. TSPs have control over underlying broadband infrastructure which OTTs and other internet-based service companies do not have.

As opposed to what has been suggested in the bill i.e, licence all telecommunication services [clause 3(2)(a)] including the internet-based services, it may be prudent to explore alternative approaches to regulate this space. For instance, a “two-layered framework”^{^[10]} for regulatory intervention can be considered. In this two-layered framework, the first layer would be the network layer consisting of the network and infrastructure; and the second layer would be the service layer consisting of applications and services. The services in the second layer can be further refined into the following three categories: (i) services provided over a non-Internet Protocol (IP) based architecture e.g Public Switched Telephone Network (PSTN) voice calls provided over a circuit switched network; (ii) specialised services that are provided over an IP based architecture in a closed network including facility-based services e.g., facilities-based VoLTE calls to PSTN and IPTV; (iii) IP-based/ Internet-based services such as OTTs. The gist^{^[11]} of the framework is:

The network layer may be regulated by way of licensing.

Non-IP Services and Specialised services may be regulated by way of licensing.

Internet-based services should be regulated by instruments other than licensing. Such instruments should preferably be in the form of legislations like the IT Act and its rules thereunder.

While there can be approaches apart from the one described above to regulate internet-based services such as the OTT and those approaches can be discussed and debated, putting licensing requirements for every internet-based service is not the way forward.

Recommendation: We recommend that the scope of the bill should be reconsidered and internet-based services should be removed from the definition of telecommunication services. In the interest of transparency and accountability, prior to enacting such a legislation the government would be well-advised to conduct a “regulatory impact assessment” exercise and put the report in public, as done in jurisdictions such as the European Union.

Chapter 3: Licensing, Registration, Authorization and Assignment

Clause 4. Licensing, Registration Authorization and Assignment

➔ 4(6): “The possession and use of any equipment that blocks telecommunication is prohibited, unless authorised by the Central Government for specific purposes.”

Comment: While assuming jurisdiction over equipment capable of blocking telecommunication via this clause is a welcome step, it is not clear why equipment capable of intercepting telecommunications has been kept out of the scope of this clause. Since unlawful and unauthorised interception of telecommunications is a violation of the fundamental right to privacy of an individual,^{^[12]} it is imperative that the scope of this clause be increased to include interception equipment as well. Furthermore, the latter part of the provision mentions “specific purposes” without adequate checks and balances in place. As such, the specific purposes must be defined exhaustively to ensure that this power is not misused.

➔ 4(7): "Any entity which is granted a licence under sub-clause (2) of clause 3, shall unequivocally identify the person to whom it provides services, through a verifiable mode of identification as may be prescribed."

Comment: All services do not require a verification of the identity of a person. There is a legitimate need to verify a person in the case of financial transactions, however a similar level of scrutiny is not warranted for applications that a person might use once, or applications that do not pose a threat to anyone. For example the need to verify a person through Know Your Customer (KYC) or otherwise for an application to order food, or an application which is meant for communication can be excessive regulation. Furthermore, number based internet communication apps such as Whatsapp require users to sign in through a mobile number, which have already gone through a KYC process. Therefore, dual KYC would be redundant and serve no purpose.

The Supreme Court while looking at the constitutionality of the Aadhaar Act upheld the need for banking and financial institutions to require an individual’s Aadhaar number stating the legitimate aim of preventing money laundering; however, the Court struck down the provision that required any private entity to collect Aadhaar details.^{^[13]} Justice Bhushan held that the collection by private entities violated the right to privacy, by failing the first prong of the test laid down in Puttaswamy, the test of legality.^{^[14]}

Recommendation : Clause 4(7) should be deleted.

➔ 4(8) “The identity of a person sending a message using telecommunication services shall be available to the user receiving such message, in such form as may be prescribed, unless specified otherwise by the Central Government.”

Comment: Although the intent behind this provision may have been to curb the menace of anonymous harassment of users, a blanket requirement to reveal the identity of the sender of a message in every instance may be considered a violation of the right to privacy of the sender. . There are clearly a number of competing rights involved here and the issue needs to be addressed in a more nuanced manner. Additionally there are a number of services such as chat applications providing support for mental health, that allow users to be anonymous in order to remove the concern and stigma around seeking help. A requirement that the user's name be revealed in these applications could hinder the functioning of these services as well as prevent more people from seeking help.

Anonymity was also explained in the Puttaswamy Judgment where it was stated that - “Privacy involves hiding information whereas anonymity involves hiding what makes it personal. An unauthorised parting of the medical records of an individual which have been furnished to a hospital will amount to an invasion of privacy.” In his judgement, Justice F. Nariman talks about different aspects of the right to privacy in the Indian context and observes “Informational privacy which does not deal with a person’s body but deals with a person’s mind, and therefore recognises that an individual may have control over the dissemination of material that is personal to him. Unauthorised use of such information may, therefore lead to infringement of this right”.^{^[15]}

In this backdrop it is perhaps preferable that the issue be addressed through separate guidelines rather than through a blanket direction in the Statute. Recently the Department of Telecom sent a reference to the TRAI for framing a mechanism for using KYC based identification.^{^[16]} It would be advisable if the TRAI in its response also takes into account the competing rights involved in this issue of caller identification and suggests a framework that addresses these concerns as well.

Retaining anonymity on the internet: Individuals may choose to remain anonymous online for a number of reasons. This includes employees expressing opinions about their employers and whistleblowers, people providing anonymous tips to newspapers or law enforcement, people expressing political opinions and criticism that may be subject to persecution, or simply someone saying something that they may be embarrassed about.^{^[17]} In India, in particular, an individual’s caste can be derived from their name, and they may choose to remain anonymous or adopt a pseudonym to escape centuries of stigma and discrimination that their communities have faced. Religious, gender and sexual minorities may also make this choice for similar reasons. The broad definition of telecommunication services in the bill places restrictions on anonymity online and severely degrades an individual’s ability to exercise their fundamental right to freedom of expression.

Right to privacy: The overly broad definition of “telecommunication services” and what constitutes a “message” also brings a number of digital services under the ambit of this bill. This can include email, instant messaging, social media services, and even payments and e-commerce transactions. Mandating identification of individuals as they navigate these services, which they require to go about their daily lives, creates an unprecedented potential for surveillance and abuse of personal information. To evaluate the legal validity of this infringement on privacy, we can utilise the necessity and proportionality tests put forth by the Puttaswamy Judgment. The explanatory note accompanying the bill states that the purpose of this provision is to “prevent cyber frauds”, establishing a legitimate aim for mandating identification. However, it fails to justify whether this is the least intrusive means necessary to achieve the stated aim. Law enforcement agencies have access to a wide variety of metadata, such as IP addresses, already collected by digital services today, which can be used to identify individuals committing cyber crimes. Furthermore, as the internet is a global network, bad actors can evade identification by routing their internet traffic through another country by using services such as Virtual Private Network (VPNs), proxies and onion routing. Well resourced actors can simply hire someone in another country to communicate on their behalf. The infringement upon the right to privacy by this provision is also disproportionate to the objective sought. By mandating storage of personally identifiable information that is not required for the operation of the wide range of services that fall under the ambit of this bill, it allows not only for state surveillance, but also creates the possibility of misuse by criminal actors and hostile states who may gain unlawful access to this information through data breaches. Overall, this provision can easily be circumvented by the bad actors it intends to catch, leaving us with a surveillance mechanism that is ripe for misuse against ordinary, law-abiding citizens.

Misunderstanding how the internet works: This draft bill assumes and propagates a centralised view of the internet. Unlike traditional telecommunication services, which require access to a finite spectrum or other physical infrastructure, the internet allows any individual or organisation to self-host their own communication service. Several organisations and technologically savvy individuals host their own email services, instant messaging services, blogs and social media networks. It is unclear how the licensing provisions in this bill apply to people developing and hosting their own communication equipment.

Recommendation : Clause 4(8) should be deleted.

Clause 5. Spectrum Management

➔ 5(2)(b): “administrative process for governmental functions or purposes in view of public interest or necessity as provided in Schedule 1; or”

Comment: Even though the draft bill seeks to provide an explicit statutory framework and predictability for spectrum management policy in India, it appears that for the large part it would be relying on spectrum auctions for assignment of spectrum. While the bill provides for administrative allocation of spectrum for governmental functions or purposes in view of public interest or necessity as provided in Schedule 1, the explanatory note provided for the draft bill indicates auction to be the predominant method for spectrum assignment. Even though the explanatory memorandum cannot be used for legal interpretation, it can be used to indicate that for the foreseeable future the government intends to allocate spectrum predominantly through auctions. While it can be argued that an auction based regime ensures transparency, it also creates significant barriers to entry for smaller operators. It is also pertinent to mention that in the seven auctions held since 2010, the government has successfully sold 100 percent of the auction only once. Relying solely on auctions since 2010 has led to unsold spectrum, lost revenue, and deferring of the rural digital ecosystem.^{^[18]} Therefore, auctions should be supplemented with “administrative allocation” and other innovative approaches to ensure that affordable broadband connectivity does not remain within the remit of a few. For instance, Canada has initiated a consultation on a non-competitive local licensing framework in the 3900-3980 MHz Band and Portions of the 26, 28 and 38 GHz Bands, and one of its objectives is to facilitate broadband connectivity in rural areas.^{^[19]} Therefore, we would like to recommend the DoT to explore other forms of spectrum assignment and not rely solely on auctions to ensure efficient utilisation of available spectrum and to also ensure affordable access to hitherto underserved regions.

Moreover, the bill does not provide clarity with regard to unlicensed spectrum for public Wi-Fi, and assignment of shared spectrum for satcom services.^{^[20]} Spectrum allocation for satcom becomes all the more important as the draft bill seems to give a preference to auction for spectrum assignment, while the global practice on spectrum assignment for satcom has been administrative allocation.

Furthermore, clause 5(2)(b) read with Schedule 1 suggests that BSNL and MTNL can acquire spectrum through an administrative process in view of public interest or necessity. However, we would like to submit that spectrum assignment to BSNL and MTNL may no longer serve the public interest and it only protects a very small interest group. For context, BSNL and MTNL have a combined market share of only 9.83%, as per TRAI subscription data of Aug 31, 2022.^{^[21]} For such a small subscriber share, it cannot be argued that these PSUs serve a public interest. The government can easily migrate these subscribers to the other three telcos. Moreover, this also provides the PSUs with an unfair advantage over its competitors and distorts the level playing field, thereby creating competition concerns in the market.

➔ 5(8): “The Central Government may, to promote optimal use of the available spectrum assign a particular part of a spectrum that has already been assigned to an entity (“primary assignee”), to one or more additional entity/ entities (“secondary assignees”), where such secondary assignment does not cause harmful interference in the use of the relevant part of the spectrum by the primary assignee, subject to the terms and conditions as may be prescribed.”

Comment: “Secondary assignment” of spectrum and the shift from “right to exclusive use” to “right to protection from interference”, as envisaged in 5(8) is a progressive move towards efficient utilisation of spectrum.

CIS, in its past submission^{^[22]} to the TRAI had highlighted the merits of a “use-or-share” approach in spectrum. The chasm that exists between expensive exclusive spectrum licensing and the licence-exempt ecosystem can be bridged by enshrining “use-it-or-share-it” provisions in spectrum licences. As such, ‘use-it-or-share-it’ rules enable the regulator to grant secondary access to licensed or governmental spectrum that is unused or underutilised.^{^[23]} ‘Use-it-or-share-it’ rules expand the productive use of spectrum without risking harmful interference or undermining the deployment plans of primary licensees. Clauses such as 5(8) enable “use-or-share” provisions are a step in the right direction.

➔ 5(9): “The Central Government, after providing a reasonable opportunity of being heard to the assignee concerned, if it determines that spectrum that has been assigned, has remained unutilized for insufficient reasons for a prescribed period, may terminate such assignment, or a part of such assignment, or prescribe further terms and conditions relating to spectrum utilization.”

Comment: There is lack of coherence between 5(8) and 5(9) when read together. 5(8) and 5(9) should be put as sub-clauses under a parent clause to ensure clarity.

We believe that the provision must be articulated clearly to state that licensees would first be given an opportunity to share spectrum and in cases where the entity fails to do so within a reasonable amount of time, the spectrum licence would be cancelled to prevent wilful spectrum hoarding. The Independent Communications Authority of South Africa (ICASA) in the 2nd Information Memorandum has expressed similar provisions with clarity. While, we feel five years may be an unnecessarily long timeframe for the government to enact spectrum sharing provisions, the language put forth by ICASA captures the essence of our argument:

“11.6.2 In cases where the spectrum is not fully utilised by the licensee within 5 years of issuance of the Radio Frequency Spectrum Licences, the Authority will initiate the process for the Licensee:

11.6.2.1 to share unused spectrum in all areas to ECNS licensees who may, inter alia, combine licensed spectrum in any innovative combinations in order to address local and rural connectivity in some municipalities including by entrepreneurial SMMEs;

11.6.2.2 to surrender the radio frequency spectrum licence or portion of the unused assigned spectrum in accordance with Radio Frequency Spectrum Regulations, 2015”

Recommendation: Clause 5(8) and 5(9) must be brought under one clause and it must be clarified that licence holders would lose their licence in case they fail to successfully incorporate spectrum sharing.

Clause 7. Breach of Terms and Conditions

➔ 7(1): “In case of breach of any of the terms and conditions of licence, registration, authorization or assignment granted under this Act, the Central Government may, after providing an opportunity of being heard to the party concerned, do any one or more of the following: ……”

Comment: Usually the consequences of breach are specifically illustrated in the licence. Listing the consequences of breach in the statute itself may lead to lack of clarity unless the terms of licence are also referenced. It could also be argued by a defaulting licensee that the powers listed in clause 7(1) are exhaustive and the Central Government cannot add any other conditions for breach of the conditions of the licence as in the licence agreement and any such conditions not specified in clause 7(1) are void and ultra vires the Statute.

Recommendation: In order to avoid such a situation, the clause should clearly state whether the powers listed in clause 7(1) are in addition to the terms and conditions that may be specified in the licence.

Chapter 4: Right of Way for Telecommunication Infrastructure

Comment: The draft bill attempts to provide for a non-discriminatory and an affordable Right-of-way regime, which is appreciable. However, the provision suggests that the central government has an overriding power over the local government. Provided that the Constitution of India defines certain powers which reside with the local authority in terms of providing permissions in the local areas, it is unclear from the bill on how the coordination between various authorities will take place. We recommend that there needs to be a mechanism that ensures coordination between centre, state, and local authorities.

❖ 14(3) : “In the event the person under sub-clause (1) does not provide the right of way requested, and the Central Government determines that it is necessary to do so in the public interest, it may, either by itself or through any other authority designated by the Central Government for this purpose, proceed to acquire the right of way for enabling the facility provider to establish, operate, maintain such telecommunication infrastructure, in the manner as may be prescribed.”

Comment: The right of the Central Government to acquire the right of way should be in lieu of adequate and appropriate compensation to be paid to the property owner. This requirement should be clearly mentioned in sub-clause (3). The clause as it currently stands only mentions the Central Government’s right to acquire but contains no mention of said acquisition being in lieu of adequate and proportionate compensation.

Chapter 5. Restructuring, Defaults in Payment and Insolvency

➔ 19(1): “Any licensee or registered entity may undertake any merger, demerger or acquisition, or other forms of restructuring, subject to provisions of applicable law, after providing notice to the Central Government of the same.”

Comment: Sub-clause (1) only requires that the Central Government be given a notice in case of merger, demerger, acquisition or restructuring of the licensee. Although sub-clause (2) requires that the successor entity shall comply with all the terms and conditions of the licence, considering the strategic nature of the telecommunications sector^{^[24]} it would be advisable to change the requirement of notice to a requirement of permission from the Central Government for restructuring the business rather than a mere notice requirement. In order for this requirement to not be a hindrance to the growth of the industry there could be a provision for deemed approval if the approval is not granted within a particular period of time.^{^[25]}

Recommendation: Any merger in the sector must be approved by the DoT. In order to ensure that this does not lead to unnecessary delays, a deemed approval route may be considered.

Chapter 6: Standards, Public Safety and National Security

❖ 24(2): “On the occurrence of any public emergency or in the interest of the public safety, the Central Government or a State Government or any officer specially authorised in this behalf by the Central or a State Government, may, if satisfied that it is necessary or expedient to do so, in the interest of the sovereignty, integrity or security of India, friendly relations with foreign states, public order, or preventing incitement to an offence, for reasons to be recorded in writing, by order:

(a) direct that any message or class of messages, to or from any person or class of persons, or relating to any particular subject, brought for transmission by, or transmitted or received by any telecommunication services or telecommunication network, shall not be transmitted, or shall be intercepted or detained or disclosed to the officer mentioned in such order; or

(b) direct that communications or class of communications to or from any person or class of persons, or relating to any particular subject, transmitted or received by any telecommunication network shall be suspended”.

Comment: The pre-conditions for interception contained in the Bill are similar to those contained in the Telegraph Act, 1885, i.e. “occurrence of any public emergency or in the interest of the public safety, the Central Government or a State Government or any officer specially authorised in this behalf by the Central or a State Government, may, if satisfied that it is necessary or expedient to do so, in the interest of the sovereignty, integrity or security of India, friendly relations with foreign states, public order, or preventing incitement to an offence”. Although more stringent, these conditions are different from those contained in the Information Technology Act, 2000 which does not contain the added safeguard of there being a “public emergency or in the interest of public safety”.^{^[26]} With consumers spending more and more time on the internet and using internet based technologies and applications for communications, there is significant regulatory overlap between the Telecommunications Bill and the Information Technology Act, 2000. It is therefore advisable that the interception and blocking provisions under both the legislations should be aligned and standardised.

The judgement in the Puttaswamy case provides some guidance to assess the limits and scope of the constitutional right to privacy in the form of the three prong test. The test requires the existence of a law, a legitimate state interest and the restriction (to privacy) should be ‘proportionate'. The order to intercept, detain, disclose or suspend a communication made between private individuals, acts as a violation of privacy and to ensure that this does not provide extensive grounds to surveil people, the three prong test especially the grounds of proportionality combined with the necessity provision are essential to ensure that this provision is not used disproportionately.

More recently in Anuradha Bhasin vs Union Of India the Supreme Court stated “A public emergency usually would involve different stages and the authorities are required to have regards to the stage, before the power can be utilised under the aforesaid rules. The appropriate balancing of the factors differs, when considering the stages of emergency and accordingly, the authorities are required to triangulate the necessity of imposition of such restriction after satisfying the proportionality requirement.” The court while passing the judgement also stated “The concept of proportionality requires a restriction to be tailored in accordance with the territorial extent of the restriction, the stage of emergency, nature of urgency, duration of such restrictive measure and nature of such restriction. The triangulation of a restriction requires the consideration of appropriateness, necessity and the least restrictive measure before being imposed.”^{^[27]} The judgement while examining the duration of the suspension mentioned that any order which suspends the internet must adhere to the principle of proportionality and must not extend beyond necessary duration.

Recommendation: There is a need to look at the implications of such an order enabling blocking or suspension of services post the Puttaswamy judgement where informational privacy, and dignity were considered as some of the aspects of privacy. While this clause uses the test of necessity and expediency, we suggest that along with these two the clause also introduce the three prong test laid out in Puttaswamy I. In addition to this since this legislation has been drafted subsequent to the Anuradha Bhasin judgement the provisions of the legislation must be in conformity with the same in order to avoid confusion and reduce litigation.

Chapter 7: Telecommunication Development Fund

➔ Clause 29: “The sums of money received towards the Telecommunication Development Fund under clause 27, shall first be credited to the Consolidated Fund of India, which shall be appropriated by the Central Government, in accordance with law made by the Parliament, to the Telecommunication Development Fund from time to time for being utilised to meet any or all of the following objectives:

(a) support universal service through promoting access to and delivery of telecommunication services in underserved rural, remote and urban areas;

(b) research and development of new telecommunication services, technologies, and products;

(d) support pilot projects, consultancy assistance and advisory support towards provision of universal service under sub-clause (a) of this clause; and

(e) support introduction of new telecommunication services, technologies, and products.”

Comment: Clause 27 of the draft bill proposes to rename the Universal Service Obligation Fund (USOF) to Telecommunication Development Fund (TDF) and expand its scope to include underserved urban areas in addition to rural and remote areas. This has been done, ostensibly to expand the scope of current USOF to include within its ambit underserved urban areas, research and development, and skill development, among others.^{^[28]} While there is a need to spend the vast amount of unspent balance within the USOF, and spending it on skill development, investments in innovative low cost-technology that enables affordable broadband connectivity for all is important, the manner in which the TDF is currently defined is loose and vague. In order to ensure that the fund is spent to include digitally marginalised groups only, the purpose for which the TDF can be used needs to have an “exact” and “specific definition”. The purpose should be narrowly defined to include only those activities that have the potential to mitigate and bridge the many digital divides that exist in our country because in its absence TDF may be misused to subsidise urban middle class users as opposed to originally intended beneficiaries - the hitherto marginalised sections of the society.

Furthermore, the Bill suggests that the money received towards the TDF shall first be credited to the Consolidated Fund of India, which shall be appropriated by the Central Government, in accordance with law made by the Parliament. This is a relic of the erstwhile USOF policy funds, and allocations are made on a demand and review basis. One of the reasons that India has an unspent balance of nearly INR 50,000 crore in USOF is owing to a delay in its implementation due to bureaucratic delays since all credits to this fund require parliamentary approvals.^{^[29]} In order to ensure that funds received through USOF/TDF are utilised efficiently, the government must ring fence these funds and ensure that they are only spent on the objectives envisaged under the TDF. Furthermore, funds collected for this purpose must not be credited to the Consolidated Fund of India since requiring additional approvals delays implementation of the fund. For instance, the rural road fund is ring fenced which has ensured smoother flow of funds.^{^[30]} Moreover, auction proceeds, and other levies on the sector such as service tax and GST are already credited to the Consolidated Fund of India, therefore the government can afford to ring fence funds collected for universal service as opposed to crediting them to the Consolidated Fund of India.

Recommendation: The objectives for which the TDF can be utilised is vague and too broad and therefore the government would be well-advised to specify that TDF can only be utilised to ensure digital access, adoption and usage for digitally marginalised groups. This would go a long way in ensuring that the funds are not misspent on providing subsidies to users that may not be in need for such a subsidy. Furthermore, TDF must be ring fenced and not credited to the Consolidated Fund of India to ensure timely implementation.

Chapter 9: Protection of users

➔ Clause 34 : “In the interest of the sovereignty, integrity or security of India, friendly relations with foreign states, public order, or preventing incitement to an offence, no user shall furnish any false particulars, suppress any material information or impersonate another person while establishing identity for availing telecommunication services.”

Comment: The intent behind this provision appears to be to prevent misrepresentation or identity and the giving of false information for availing telecom services. Whilst it is understandable that there may be privacy issues involved in the matter of revealing one’s identity for availing telecommunications services, the requirement to provide correct identity documents is a well established and accepted norm in the industry today which is manifest in the KYC requirements that have to be fulfilled by every customer. Therefore there is no need to qualify the obligation to provide true and accurate documents with the phrase “in the interest of the sovereignty, integrity or security of India, friendly relations with foreign states, public order, or preventing incitement to an offence”.

Chapter 10: Miscellaneous

➔ Clause 46: Amendment to Act 24 of 1997

Comment: Clause 46 of the Bill significantly dilutes the power of TRAI and effectively renders the Regulator to the role of the government’s rubber stamp through proposed amendments to clause 11^{^[31]} of the TRAI Act. Section 11 of the TRAI Act as it currently stands requires DoT to solicit recommendations from TRAI on issues pertaining to licensing, new services, and spectrum management, where the powers vest with the government. However, if the Bill becomes a law, this would not be mandatory on the government’s part. It may or may not seek the Regulator’s recommendations, thus eroding the transparency which was built in the process of policymaking. Consequently, as per the current Bill, the government will effectively be the licensor, operator, and the Regulator. Since the government owns BSNL/MTNL (a telecom operator) the role of an independent regulator assumes even more significance. Even without the proposed amendments, the Indian regulator has been largely ineffective since it lacks significant functional autonomy including negligible penalisation powers, limited role in its hiring decisions, and lack of financial autonomy since it needs DoT’s approvals for its budget.^{^[32]} Even in its present form, TRAI has lesser power as compared to many regulators across the globe. For instance Federal Communications Commission (FCC) of the USA, Ofcom of the UK, and regulators in Pakistan, Bangladesh, and Sri Lanka have powers over spectrum and licensing, while TRAI has only recommendatory powers.^{^[33]} With the advent of 5G, the lines between telecom and digital services are likely to blur even more and in order to ensure that we are able to exploit the vast potential this new wave of innovations could unleash, it is important to have skilled policymakers well-versed with technology at the helm of affairs. Amidst this backdrop, it is important to invest in enhancing TRAI’s competence by hiring subject matter experts, and ensuring that TRAI functions as an independent and transparent regulator.

Furthermore, the bill empowers the government to set up an alternate dispute resolution mechanism effectively making the role of Telecom Disputes Settlement and Appellate Tribunal (TDSAT) redundant. Currently, TDSAT is the first body which looks into any dispute between two (i) telecom operators, (ii) telecom operators and the government, and (iii) between operators, the government and as well as the regulator. Only once the TDSAT has passed orders on such disputes can they be appealed in the Supreme Court. Therefore, clauses diluting the power of TRAI must be deleted. The government must also clarify what it means by an alternate dispute resolution mechanism, and the role it envisages for TDSAT.

Lastly, TRAI process is consultative by design providing various stakeholders with an opportunity to participate in the policymaking process. However, the proposed bill does not have any provisions mandating the DoT to hold transparent stakeholder consultations.

Recommendation: Clause 46 of the proposed bill should be deleted. Furthermore, the government must work towards further strengthening TRAI by hiring subject matter experts and further empowering TRAI by giving it penalising powers. Also, TRAI must be responsible for conducting spectrum audits and ensuring that licensees are adhering to licensing conditions.

➔ 46(k): “Provided further that the Authority may direct a licensee or class of licensees to abstain from predatory pricing that is harmful to the overall health of the telecommunication sector, competition, long term development and fair market mechanism” shall be inserted.”

Comment: The Bill through clause 46 (k) empowers the TRAI to decide on ‘predatory pricing’, which falls within the remit of the Competition Commission of India (CCI) which could potentially create jurisdictional overlaps between the two regulators. Even in the past, there has been friction between the two regulators on whether TRAI has jurisdiction to decide on matters relating to competition and predatory pricing in telecom tariffs.^{^[34]} In Competition Commission of India v. Bharti Airtel Limited & Ors^{^[35]}, Supreme Court of India rejected the contention by the incumbent dominant operators (IDOs) that TRAI, as the sectoral regulator, had exclusive jurisdiction to rule on competition-related aspects in the industry. It ruled that if TRAI had determined that the IDOs had formed a cartel or colluded to block Jio’s entry, the CCI then would have jurisdiction to decide whether the IDOs’ actions had an appreciable adverse effect on competition. While TRAI’s powers of sanction were limited by the TRAI Act, the CCI had the power to prescribe and enforce structural remedies to promote genuine competition in the telecom sector. The court prescribed comity between TRAI and the CCI in the discharge of their roles.^{^[36]} Over time, the telecom sector has evolved from being a rudimentary voice service to being a complex data-centric converged service, and even though overlapping jurisdictions cannot be completely wished away,^{^[37]} there is a need for clearly defined roles for various ministries and regulators. And there will also be a need to adopt a consultative approach towards policymaking through inter-departmental consultations, an area that India has thus far been lacking in. As evidenced by the International Telecommunication Union’s (ITU) Global ICT Regulatory Outlook 2020, which ranks India at 94 (out of a total of 193) countries in terms of the maturity and collaborative approach shown by telecom regulatory bodies, lower than countries such as Japan, Singapore, Korea, Pakistan, Kenya, and Nigeria.^{^[38]}

Therefore, inserting such a provision may create more chaos and regulatory uncertainty. It is advisable that the government ensures there are no jurisdictional issues between the two regulators by clearly defining the role of TRAI and inserting provisions to facilitate inter regulatory consultation mechanism.

➔ Clause 48: “If the person committing an offence under this Act is a company, the employee(s) who at the time the offence was committed, was responsible to the company for the conduct of the business relating to the offence, shall be liable to be proceeded against and punished accordingly.”

Comment: While there is a need to ensure that offenders and violators of provisions under this Act are provided with penalties, there is a need to look at ways to ensure that the fear of penalties does not stifle innovation. This legislation intends to bring into its ambit a number of new stakeholders who might not be able to comply with all the requirements due to the inexperience, which could lead to inadvertent offences and violations. The current wording of clause 48, does not make any distinction between offences that were done with prior knowledge and malafide intentions and those done without knowledge of its commission.

Recommendation: We suggest that the Act keeps the wordings in line with similar legislations such as the draft Personal Data Protection Bill 2019. The revised text could have a proviso that reads as “Nothing contained in sub-clause (1) shall render any such person liable to any punishment provided in this Act, if he proves that the offence was committed without his knowledge or that he had exercised all due diligence to prevent the commission of such offence.”

Keeping in mind the existing burden of work both on the executive and the judiciary, and the time sensitive nature of the provisions of the Bill there is a need to look at different, swift, and inexpensive strategies. One possible way could be through Informal Guidances, similar to Security and Exchange Board of India (SEBI)’s Informal Guidance Scheme, which enables regulated entities to approach the Authority for non-binding advice on the position of law.^{^[39]} As there will be a number of new players that will be under the Bill, it would be useful for entities to get guidance. Another possible step could be to use Undertakings, where the regulator enforces the errant party to seek contractual undertakings to take certain remedial steps.^{^[40]}

➔ Clause 51: “Notwithstanding anything contained in any law for the time being in force, where the Central Government, a State Government or a Government of a Union Territory is satisfied that any information, document or record in possession or control of any licensee, registered entity or assignee relating to any telecommunication services, telecommunication network, telecommunication infrastructure or use of spectrum, availed of by any entity or consumer or subscriber is necessary to be furnished in relation to any pending or apprehended civil or criminal proceedings, an officer, specially authorised in writing by such Government in this behalf, shall direct such licensee, registered entity or assignee to furnish such information, document or record to him and the licensee, registered entity or assignee shall comply with the direction of such officer.”

Comment: The requirement to provide information or document even for “pending or apprehended civil or criminal proceedings” is too wide and could be misutilised, specially given the fact that there is no judicial authority making the determination that the information or document is required for such proceedings. Even in clause 91 of the Cr.P.C. , the requirement to provide documents or information is only for existing investigations, inquiries, trials or proceedings. Therefore the requirement to provide information, document or record for apprehended civil proceedings should be deleted.

Additional Comments

➔ Comment: The bill fails to incorporate net neutrality requirements

Technological convergence and vertical integration within the sector make adherence to net neutrality critical to keep discrimination and anti-competitive conduct in check. While extant TRAI regulations, forbid TSPs from discriminating on the basis of content, sender or receiver, protocols or user equipment based on prior arrangements, by slowing down one application or providing fast lanes to another. However, there is lack of clarity on how adherence to net-neutrality principles is currently being monitored. In 2020, TRAI had recommended setting up a Multistakeholder body for monitoring adherence to net neutrality by licensees.^{^[41]} However, the draft bill fails to codify net neutrality requirements and as such non-discriminatory treatment of traffic does not find a mention in the bill or the explanatory note accompanying it.

Recommendation: The government must act on TRAI’s recommendations and set up the multistakeholder body to check adherence to net neutrality requirements by incorporating provisions to that effect.

➔ Comment: There is no provision in the bill that requires the government to report vital statistics and other information relating to the sector. We understand that both TRAI and DoT have taken efforts in publishing those statistics through DoT dashboard and reports such as the annual report, performance indicator reports, and subscriber reports. But, putting reporting requirements in the statute would be better.

Recommendation: In the interest of transparency and accountability, a clause requiring the government to report (quarterly or annually) vital statistics relating to the functioning and financial aspects of matters contained within the draft legislation. The reporting should also include the number of licences provided, licences revoked, number of blocking and suspension orders passed among others.

^{^[1]} “Response to TRAI consultation on Auction of Spectrum in frequency bands identified for IMT/5G”, Centre for Internet and Society, accessed 10 November 2022,https://cis-india.org/telecom/blog/response-to-trai-consultation-auction-of-spectrum-in-frequency-bands-identified-for-imt-5g

^{^[2]} “Response to TRAI Consultation Paper on Regulatory Framework for Over-The-Top (OTT) Communication Services”,Centre for Internet and Society, accessed 10 November 2022, https://cis-india.org/internet-governance/blog/response-to-trai-consultation-paper-on-regulatory-framework-for-over-the-top-ott-communication-services

^{^[3]} “Impact Assessments”, European Commission, accessed 10 November 2022,<https://ec.europa.eu/info/law/law-making-process/planning-and-proposing-law/impact-assessments_en#:~:text=Impact%20assessments%20examine%20whether%20there,support%20the%20decision%2Dmaking%20process.>

^{^[4]} Clause 2(5) defines customer equipment as follows: “ “customer equipment” means equipment deployed on the premises of a person, other than the equipment of the licensee or registered entity, to originate, route or terminate telecommunication, or equipment used by such person for accessing telecommunication services;”

^{^[5]} As defined in clause 2(9) of the draft bill.

^{^[6]} Japan: "Telecommunications service" means intermediating communications of others through the use of telecommunications facilities, or any other acts of providing telecommunications facilities for the use of communications by others; Singapore: “telecommunication service” means any service for telecommunications but excludes any broadcasting service; UK: “electronic communications service” means a service of any of the types specified in subsection (2A) provided by means of an electronic communications network, except so far as it is a content service. Those types of service are— (a)an internet access service; (b)a number-based interpersonal communications service; and (c)any other service consisting in, or having as its principal feature, the conveyance of signals, such as a transmission service used for machine-to-machine services or for broadcasting.

^{^[7]} Muntazir Abbas, “Regulating OTT players complicated: Trai”, The Economic Times, 30 January 2020,<https://economictimes.indiatimes.com/industry/telecom/telecom-policy/regulating-ott-players-complicated-trai/articleshow/73759307.cms?from=mdr >

^{^[8]} Justin Douglas and Amy Land Pejoska, Regulation and Small Business, <https://treasury.gov.au/sites/default/files/2019-03/p2017-t213722-Roundup_Sml_bus_regulation-final.pdf>

^{^[9]} See, for instance, “Features, Whatsapp (2020), <https://www.whatsapp.com/features>; “Signal

Messenger Features”, Signal (2020)

^{^[10]} CIS has recommended this “two layered framework” in its previous submissions to TRAI.

^{^[11]} “Response to TRAI Consultation Paper on Regulatory Framework for Over-The-Top (OTT) Communication Services”,Centre for Internet and Society.

^{^[12]} “Internet Privacy in India”,Centre for Internet and Society, accessed 10 November 2022,https://cis-india.org/telecom/knowledge-repository-on-internet-access/internet-privacy-in-india

^{^[13]}Justice K. Puttaswamy and Others v. Union of India and Others 1 SCC 1 (2019)

^{^[14]}“Judgement in Plain English Constitutionality of Aadhaar Act”, “Supreme Court Observer, accessed 10 November 20222,https://www.scobserver.in/reports/constitutionality-of-aadhaar-justice-k-s-puttaswamy-union-of-india-judgment-in-plain-english/

^{^[15]} “Right to Encrypt : Subset of Right to Privacy?”, SFLC, accessed 10 November 20222,https://sflc.in/right-encrypt-subset-right-privacy

^{^[16]} PTI, “Trai to moot mechanism for KYC-based caller name display”,The Economic Times, 20 May 2022,https://economictimes.indiatimes.com/industry/telecom/telecom-news/trai-to-moot-mechanism-for-kyc-based-caller-name-display/articleshow/91695117.cms?from=mdr

^{^[17]} Palme, Jacob, and Mikael Berglund. "Anonymity on the Internet.” <https://people.dsv.su.se/~jpalme/society/anonymity.pdf >

^{^[18]} Rajat Kathuria, Isha Suri “Why spectrum needs a change in approach”, Indian Express, 20 October 2022, https://indianexpress.com/article/opinion/columns/why-spectrum-needs-a-change-in-approach-8235997/

^{^[19]} Consultation on a Non-Competitive Local Licensing Framework, Including Spectrum in the 3900-3980 MHz Band and Portions of the 26, 28 and 38 GHz Bands - Spectrum management and telecommunications

^{^[20]} Aneesh Phadnis“Extant rules choke growth, telecom bill needs review: Broadband India Forum”, Business Standard, 23 September2022<https://www.business-standard.com/article/companies/extant-rules-choke-growth-telecom-bill-needs-review-broadband-india-forum-122092301265_1.html >

^{^[21]} Highlights of Telecom Subscription Data as on 31st August, 2022, TRAI, accessed 10 November 2022, https://www.trai.gov.in/sites/default/files/PR_No.67of2022.pdf

^{^[22]} “Response to TRAI consultation on Auction of Spectrum in frequency bands identified for IMT/5G”, Centre for Internet and Society.

^{^[23]} Calabrese, M. (2021). Use it or Share It: A New Default Policy for Spectrum Management. Available at SSRN 3762098. <https://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID3762098_code2826029.pdf?abstractid=3762098&mirid=1 >

^{^[24]} “Guidelines for Implementation of New Public Sector Enterprises (PSEI Policy for CPSEs in Non-Strategic Sector' regarding”, “Government of India Ministry of Finance Department of Public EnterPrises, 10 November 2022, https://dpe.gov.in/sites/default/files/DPE_OM_DTD_13.12.21_Guidelines_on_New_PSE_Policy_0.pdf, Economic Survey 2021-2022, India Budget, accessed 10 November 2022, <https://www.indiabudget.gov.in/economicsurvey/ebook_es2022/index.html#p=86 >

^{^[25]} A similar approach has been taken in the new Occupational Safety, Health and Working Conditions Code, 2020 for registration of establishments under clause 3(3) of the Code.

^{^[26]} Sections 69 and 69A of the Information Technology Act, 2000.

^{^[27]} Anuradha Bhasin vs Union Of India, 3 SCC 637 (2020)

^{^[28]} Explanatory Note to the draft Indian Telecommunication Bill, 2022, Pg. 14.

^{^[29]}“USOF Scheme for Aspirational Districts in 5 states”, “Drishti IAS”, accessed 10 November 2022, https://www.drishtiias.com/daily-updates/daily-news-analysis/usof-scheme-for-aspirational-districts-in-5-states

^{^[30]}“What BharatNet can learn from the rural-roads scheme: involve states, local bodies, private sector” “ Centre for Internet and Society, accessed 10 November 2022, https://cis-india.org/telecom/blog/what-bharatnet-can-learn-from-the-rural-roads-scheme-involve-states-local-bodies-private-sector

^{^[31]} Functions of Authority, clause 11, TRAI Act, 1997.

^{^[32]} Pratap Vikram Singh, “Trai, try again: India’s toothless telecom regulator fights for more powers”, Aug 31, 2021, The Ken, <https://the-ken.com/story/trai-try-again-indias-toothless-telecom-regulator-fights-for-more-powers/>

^{^[33]} Ibid.

^{^[34]} “PTI” “Have power to settle competitive tariff issues: TRAI to CCI”, Aug 7, 2017, The Economic Times, https://economictimes.indiatimes.com/news/economy/policy/have-power-to-settle-competitive-tariff-issues-trai-to-cci/articleshow/59959144.cms?from=mdr

^{^[35]} CIVIL APPEAL NO(S). 11843 OF 2018

^{^[36]} Ibid at Para 90

^{^[37]} “Market Study on the Telecom Sector”, Jan 22, 2021, Competition Commission of India

^{^[38]} Global ICT Regulatory Outlook 2020 - Pointing the way forward to collaborative regulation (2020), ITU, https://www.itu.int/dms_pub/itu-d/opb/pref/D-PREF-BB.REG_OUT01-2020-PDF-E.pdf

^{^[39]}Informal Guidance Scheme of SEBI: Understanding the Concept and Analyzing the Guidance Provided by SEBI, Vijay Kumar Singh https://www.researchgate.net/publication/228226352_Informal_Guidance_Scheme_of_SEBI_Understanding_the_Concept_and_Analyzing_the_Guidance_Provided_by_SEBI>

^{^[40]} We have made similar recommendations to the Personal Data Protection Bill 2019, on the offences and penalties under the Bill. The comments can be viewed here: <https://cis-india.org/accessibility/blog/cis-general-comments-to-the-pdp-bill-2019>

^{^[41]}Recommendations On Traffic Management Practices (TMPs) and MultiStakeholder Body for Net Neutrality, TRAI, accessed 10 November 2022, https://www.trai.gov.in/sites/default/files/Recommendations_22092020_0.pdf

The comments were drafted by Abhishek Raj, Divyank Katira, Isha Suri, Shweta Mohandas and Vipul Kharbanda, and reviewed by Pallavi Bedi. Click to download the submission here

For more details visit https://cis-india.org/telecom/blog/cis-comments-to-draft-indian-telecom-bill-2022

Why spectrum needs a change in approach

Rajat Kathuria and Isha Suri — 2023-01-18T23:35:10Z

Rajat Kathuria and Isha Suri write: It must be recognised that spectrum needs to be combined with other infrastructure to enable service delivery.

One must bear in mind that the cost of deploying other infrastructure in remote areas is nearly twice as much, while revenue opportunities are far lower, damaging if not destroying the rural business case. The stark digital divide needs a fresh approach to crack it.

On September 22, the government released the draft Indian Telecommunication Bill, 2022, seeking to replace the colonial era Indian Telegraph Act, 1885. The draft bill compares spectrum to aatma: “In a way, spectrum is similar to aatma, which is ajar, amar as described in Shrimad Bhagwad Gita. Like aatma, spectrum too does not have any physical form, yet it is omnipresent.” And yet there is one immutable difference in this material world. While the value of aatma is inestimable, spectrum has always had a banal price tag associated with it.

Click to access the full article published in Indian Express on October 29, 2022

For more details visit https://cis-india.org/telecom/blog/indian-express-rajat-kathuria-isha-suri-why-spectrum-needs-a-change-in-approach

An Overview of Telecommunications Policy and Regulation Framework in India

abhishek — 2022-03-25T02:06:28Z

Abhishek Raj, a researcher at the Centre for Internet Society (CIS), has authored a document that provides an overview of the policy and regulatory environment surrounding telecommunications in India.

It summarises the legal and policy instruments that regulate telecom and internet service providers in the country. It covers following areas:

General overview of acts and associated policiesO
Operator licensing
Spectrum and associated fees
Backbone and backhaul infrastructure
Universal service/financial support
Gender and telecom

Read the full document here

The information from this document has also been added to the India’s country profile on the LocNet Wiki, which is regularly updated to keep abreast with developments in telecom policy.

The author is thankful to Divyansha Sehgal, Gurshabad Grover and Isha Suri for their review and suggestions.

For more details visit https://cis-india.org/telecom/blog/an-overview-telecommunications-policy-and-regulation-framework-in-india

Response to TRAI consultation on Auction of Spectrum in frequency bands identified for IMT/5G

Abhishek Raj, Steve Song and Udbhav Tiwari — 2022-03-25T02:05:01Z

The Centre for Internet and Society (CIS) and Mozilla jointly submitted comments to Telecom Regulatory Authority of India’s consultation paper on auction of spectrum in frequency bands identified for IMT/5G, released on 30 November 2021.

This submission brings out the merits of a “use-it-or-share it” approach for spectrum to help bridge the rural connectivity gap. CIS appreciates the continual efforts of Telecom Regulatory Authority of India to have consultations, and is grateful for the opportunity to put forth its views and comments. Read our full response here.

For more details visit https://cis-india.org/telecom/blog/response-to-trai-consultation-auction-of-spectrum-in-frequency-bands-identified-for-imt-5g

Opinion: Delicensing 6 GHz, 60 GHz bands is crucial to improve Wi-Fi scenario in India

abhishek — 2022-01-03T15:30:43Z

Recently, there has been growing demand from industry bodies and associations to delicense 6 GHz and 60 GHz bands in India.

The article by Abhishek Raj was published by the News Minute on December 21, 2021.

The Wi-Fi space has become a lot more exciting with the emergence of new Wi-Fi standards such as Wi-Fi 6E (the latest generation of Wi-Fi) and WiGig (that uses the V-band and offers advantages such as faster gigabit speeds). These standards require airwaves in 6 GHz and 60 GHz frequency bands to operate. As a consequence, governments and telecom regulators across the globe are deliberating on policy options for spectrum allocation in the aforementioned bands.

Stakeholders are divided on the issue of allocating 6 GHz and 60 GHz bands in India. For instance, there are certain telcos who strongly oppose delicensing these bands and demand a licensed framework with the use of auctions for allocation. As per their argument, delicensing the said bands will put their investments at risk and upset a level playing field. Whereas, on the other side, US tech majors Cisco and Intel, alongside industry bodies and forums such as the ITU-APT Foundation of India and Broadband India Forum, are in favor of delicensing. Notably, the delicensed/ unlicensed frequency bands are “free to use” by anyone, and the users need not pay any fees or obtain a license (right to use) from the government. On the contrary, licensed bands come with a “right to exclusive use” and are usually allocated through auction. They have associated costs including auction amount, license fees, usage charges, etc.

In this article, I argue that the government should consider delicensing the 6 GHz band and 60 GHz range in the V-band, simply known as the 60 GHz band, to meet the increasing data demand, provide a better connection experience, and, more importantly, unlock the economic value and potential of these bands.

Evolution of Wi-Fi Standards

Let us begin by understanding the fundamentals of Wi-Fi and its evolution over the years. Wi-Fi is a wireless networking technology based on the Institute of Electrical and Electronics Engineers (IEEE) standard 802.11. To keep things simple, consider ‘Wi-Fi’ a user-friendly name for IEEE 802.11 standard. Since its advent in 1997, Wi-Fi has become an indispensable wireless technology alongside mobile technology. The term ‘Wi-Fi’ is used synonymously with the internet by many users as a result of its widespread use in providing an interface with the internet.

IEEE 802.11 standards have evolved over the years, from 802.11a to 802.11ax. Again, these terms don’t sound so user-friendly, and for this reason, Wi-Fi alliance, a non-profit organisation that owns Wi-Fi trademark, came up with simplified generational names such as Wi-Fi 4, Wi-Fi 5, Wi-Fi 6, etc. The most recent Wi-Fi 6E [read Wi-Fi 6th generation- extended] is a simplified name for IEEE 802.11 ax standard. Needless to say, every new generation of Wi-Fi brings greater speed, lower latency, and a better user experience.

Benefits of Wi-Fi 6E & WiGig: Case for Delicensing

In addition to the pre-existing growth in demand for data, the COVID-19 pandemic has escalated data requirements due to the radical shift to work-from-home, online classes, etc. Dependence on Wi-Fi has increased in parallel to meet this increase in demand. On the other hand, India has only around 700 MHz of spectrum available for unlicensed use, concentrated majorly in 2.4 GHz and 5 GHz bands which are currently used for Wi-Fi services in India. The 2.4 GHz band is already crowded, and the same is anticipated for the latter. In order to support the growing data demand, policymakers in India need to explore the option of opening up more unlicensed spectrum. Notably, the quantum of unlicensed spectrum in India is significantly lower than in other countries such as the USA, UK, China, Japan, and Brazil, all of which have approximately 15,000 MHz of unlicensed spectrum.

The policy reluctance of DoT to delicense more spectrum is partly because of fear of losing out on revenues which licensed spectrum generates, and partly because of a narrow interpretation of Supreme Court’s 2012 judgement. However, considering the recent developments in Wi-Fi, 6 GHz and 60 GHz bands appear to be ideal candidates for creating more unlicensed spectrum. Let us explore this further.

Unlike its previous versions, which operated in either the 2.4 GHz or the 5 GHz band, Wi-Fi 6E operates in the 6 GHz band. The 6 GHz band contains radio frequencies between 5.925 and 7.125 GHz, and is much wider than the 2.4 GHz and 5 GHz bands. The wide channels, along with other distinct features such as lesser interference, enable Wi-Fi 6E to perform with better speeds, even in multi-user connected, congested, and dense networks.

Furthermore, Wi-Fi 6E is a new and niche technology, whose market will undoubtedly develop in the coming years. Indian telecom hardware and software companies have the opportunity to capture a chunk of this market in India as well as globally. We know that service provision in unlicensed bands is less expensive, and thus attracts a lot of innovations. We need to open up the 6 GHz band very soon to foster innovations by indigenous companies. We took a late call on delicensing the 5 GHz band which affected the prospects of Indian innovators and companies. We can’t afford to repeat this.

Similarly, we have WiGig – another exciting Wi-Fi technology. WiGig uses the V-band’s 60 GHz range (i.e., airwaves between 57-71 GHz frequency) to operate. The V-band offers advantages such as faster gigabit speeds and lack of interference due to oxygen absorption within its frequency range, making this band ideal for shared unlicensed use. The government launched a public Wi-Fi initiative of India known as PM-WANI in December 2020. PM-WANI aims to promote broadband in the country through the deployment of public Wi-Fi access points. Supporting such a dense deployment of Wi-Fi access points would require a “fiber speed” backbone. However, cost structure and right-of-way hurdles may be prohibitive for the deployment of fiber backhaul in dense urban environments. WiGig offers a cost-efficient wireless backhaul solution as an alternative to fiber backhaul, with multigigabit speeds and reliability similar to fiber. Delicensing the 60 GHz band can thus especially benefit PM-WANI, because of its potential to provide alternative backhaul solutions.

It is important to remember that unlicensed bands for Wi-Fi access have significant economic value. Although unlicensed bands do not generate direct revenue for the government through auctions, spectrum usage charges, etc., the economic value of unlicensed Wi-Fi is huge. According to a report by Wi-Fi Alliance, the global economic value of Wi-Fi will reach Rs 362 lakh crore (USD 4.9 trillion) by 2025. A BIF (Broadband India Forum) report authored by Prof. Rekha Jain estimates the economic value of Wi-Fi in unlicensed spectrum bands (2.4 GHz, 5GHz, 6 GHz, and 60 GHz) for 2025 to be INR 12.7 lakh crore in India. A major concern raised by telcos recently is that the government might lose out on revenue if 6 GHz and 60 GHz bands are delicensed instead of licensing and sold through auction. However, this concern seems to be evidently misplaced due to the huge economic potential of these bands, as also pointed out by other experts.

Several other jurisdictions have already started delicensing these bands. Almost 35 countries, including the USA, UK, Brazil, UAE, and Korea have delicensed the 6 GHz band, and several others are considering the same. Similarly, around 70 countries across the globe have delicensed the V-band in the 60 GHz range.

Conclusion

Wi-Fi 6E and WiGig are exciting technologies with numerous benefits and will play a crucial role in improving the Wi-Fi scenario in India. Had the 2.4 GHz and 5 GHz bands not been delicensed in the past, could we have even imagined a Wi-Fi revolution? The government must consider delicensing the 6 GHz and 60 GHz bands to bring in the next Wi-Fi revolution.

(The author is thankful to Arindrajit Basu and Isha Suri for their review and suggestions.)

For more details visit https://cis-india.org/telecom/blog/the-news-minute-december-21-2021-abhishek-raj-opinion-delicensing-6-ghz-60-ghz-bands-crucial-improve-wi-fi-scenario-india

Gram Panchayat Development Plan (GPDP): An Opportunity for Funding Rural Internet Connectivity in India

abhishek — 2021-12-14T02:12:53Z

A paper titled "Gram Panchayat Development Plan (GPDP): An Opportunity for Funding Rural Internet Connectivity in India" authored by CIS' researcher Abhishek Raj got published in the book "Community Networks: Towards Sustainable Funding Models". This book was released at the United Nations Internet Governance Forum(IGF) 2021, and is also the official outcome of the IGF Dynamic Coalition on Community Connectivity (DC3).

Internet connectivity has become important for socio-economic development of any region, especially the rural and remote regions. However, a major population of the world including India still remains unconnected to the internet. The traditional ‘top-down’ approach for enabling connectivity has proved to be insufficient for rural and remote areas. In this paper, we discuss an alternative ‘bottom-up’ sustainable multistakeholder model for enabling connectivity in rural India which has an active involvement of the village community through ‘Gram Panchayats’ (also known as Village Council). We also discuss the funding mechanism for this model through ‘Gram Panchayat Development Plan (GPDP)’. We suggest that ‘Internet for Development’ be included as one of the cross-cutting development areas in the GPDP to fund access to the internet in villages.

Click here to access full PDF of the paper. (Refer p. 129- 146). The author extends thanks to co-authors of the paper Dr. Sarbani Banerjee Belur and Ritu Srivastava.

For more details visit https://cis-india.org/telecom/blog/gpdp-an-opportunity-for-funding-rural-internet

Response to TRAI Consultation Paper on Broadband Connectivity and Speed

Shyam Ponappa — 2020-12-20T08:43:20Z

CIS comments on Telecom Regulatory Authority of India’s Consultation Paper on Roadmap to Promote Broadband Connectivity and Enhanced Broadband Speed

This submission presents a response by individuals working at the Centre for Internet & Society (CIS) to the Telecom Regulatory Authority of India’s Consultation Paper on Roadmap to Promote Broadband Connectivity and Enhanced Broadband Speed (hereinafter, the “TRAI Consultation Paper”) released on 20 August, 2020 for comments.

CIS appreciates the continual efforts of Telecom Regulatory Authority of India (TRAI) to have consultations, and is grateful for the opportunity to put forth its views and comments.

Read the response here.

For more details visit https://cis-india.org/telecom/blog/response-to-trai-consultation-paper-on-broadband-connectivity-and-speed

Unlock = Open, not Choked!

Shyam Ponappa — 2020-06-15T03:04:18Z

Don't let a virus stall initiatives and weaken the economy.

This article first appeared in the Business Standard and on June 4, 2020.

A recent column in this newspaper juxtaposed the way smart, experienced people have high expectations, only to be disappointed by our weak state’s predictable failures (Strong expectations from a weak state, May 25). Is there justification for any optimism, or at least hope? Here is an exploration of reasons for persisting in the face of continued odds, and pushing for economic recovery. Why should one persist with constructive efforts? Because a rising tide lifts all boats, and one’s contribution can affect outcomes. And because attempts at partial opening will not suffice.

There could be new economic opportunities by way of capacity, logistics or markets, or a wider array of sustainable consumer choices, whether for manufactured goods, services, or activities. Think back, and surely you have witnessed government action extend beyond the grind of just keeping everything going.

One instance of major change that affected the economy was in 1990, when the secretary of the Department of Electronics N Vittal worked in close consultation with industry. This resulted in path-breaking reforms, such as the setting up of “high-speed” links (of a mere 64 kilobits per second at the time) between Information Technology (IT) companies in Indian software technology parks and their international clients, and various tax incentives that followed much later. The offshore services industry gathered strength, and later expanded to cover IT-enabled services with call centres and business processing, extending to knowledge processing.

Likewise, telecommunications reforms began in 1990, when prime minister Chandra Shekhar led a shaky government for a brief period. The telecommunications ministry was looking for a private sector consultant. Through an invisible network, an investment banker who had been a management consultant in San Francisco was asked to look into telecommunications reforms. This led to the setting up of the Athreya Committee and its recommendations: On separating policy-making from operations, corporatising the Mahanagar Telephone Nigam as an operating company for Delhi and Mumbai, and Bharat Sanchar Nigam for the rest, while recommending access to private sector operators. All this was not smooth and painless, and took years, but did happen eventually, although the separation remains untidy.

By 1998, telecommunications operators were in a situation similar to the predicament some months ago, of weak revenues and a debt overhang, with some differences. There were many operators with heavy debt because of government charges and limited revenue generation capacity, because of smaller networks and less clients. This is the “winners’ curse” of auctions, when exorbitant amounts are paid to government for auctions, with nothing left for building and running networks and enterprises to generate the revenues to justify those payments. There are exceptions, as in the social democrat Nordic states, or state-controlled allocations as in China, or in Japan for a number of years.

Key people in government grasped this. The Prime Minister’s Office consulted with industry and external consultants, and took action. This resulted in the New Telecom Policy 1999 (NTP-99), whereby the major change was converting up-front licence fees to revenue sharing, although the policy was uneven because of cherry-picked recommendations. Initially, the government set the percentage share too high. It took years to reduce and trigger rapid growth. This came about through reduced government charges, calling party pays (which cut call costs), and a price war, brought on by the stealth entry of a new technology (CDMA) network, which the authorities allowed despite incumbent protests. Mobile services then grew exponentially from 2004, until the 2G spectrum scam surfaced in 2011.

A stream of articles advocated extending revenue-sharing to spectrum fees as for licence fees, and for shared infrastructure including spectrum. In 2011, a senior official in the DoT was sufficiently impressed to explore the possibility of evaluating alternatives using simulation models. But the 2G scam broke after the first few meetings of DoT officials, and this process was aborted. Instead of major changes based on simulations, a mere statement of intent about spectrum pooling and sharing made it into NTP-2012.

There were other incredible developments, although with no apparent results (yet). For instance, in 2013, a non-governmental organisation, the Centre for Internet and Society in Bengaluru, arranged for the former chief technology officer of the US Federal Communications Commission, Jon Peha, who had pioneered changes in America, to meet with top officials of the DoT, the Telecom Regulatory Authority of India, and some IIT professors. The latter conducted successful trials using TV White Space spectrum for the Ministry of Electronics and Information Technology. The details are many, but the point is that constructive advocacy can have an impact.

Reviving the Economy Now

We are in a difficult situation, with our economy and society battered by the lockdown and much else. We will need to do everything possible to recover, and it will take years. Attempts at partial opening will not suffice. Systemic revival calls for unrestricted flows of money, people, activity, and goods and services.

While reactivating the economy, we will need to be cautious through the pandemic (through “social distancing”, using masks to reduce infection, avoiding close contact with outsiders, and so on). But survivors have to live with this virus, as with other strains of viruses and bacteria, and other threats.

Consider traffic accidents, which average over 145,000 deaths annually (data 2013-2017: https://ncrb.gov.in/sites/default/files/chapter-1A-traffic-accidents-2017_0.pdf). Extrapolating, this means a million fatalities in seven years, yet we don’t shut down all traffic. By comparison, Covid-19 had about 6,000 fatalities since January.

A proportion of the medical fraternity opines that (a) there is community spread of Covid-19, and (b) with many cases milder than the expected severity, that most patients need home care rather than hospitalisation. If these continue, our health systems will not be overwhelmed with severe cases. Also, so far, India has had a relatively low fatality rate of 2.8 per cent (see chart).

Source: Data - https://ourworldindata.org/coronavirus

As long as these factors hold, our priority has to be unfettered economic activity. Countries with higher fatality rates, including Sweden, China, Japan and Germany in the chart, have open economic activity (with tremendous productivity). We will weaken and our problems will escalate if we are held back.

For more details visit https://cis-india.org/telecom/blog/unlock-open-not-choked

Kick-start the economy with cash flow

Shyam Ponappa — 2020-05-24T20:43:56Z

Pay government dues and enable high-speed connectivity

This article first appeared in the Business Standard and on May 7, 2020.

Amidst the welter of problems the government is dealing with, one hopes that the removal of restrictions and lockdown status are being thought through with expert inputs and analysis. We can conjecture on the priorities for economic revival, and here is a short wish list.

Cash flows have to start for any downstream problems to be addressed, without questioning that a major remediation to India’s lockdown trauma is providing food and shelter to stranded workers, and getting them to where they want to go. Many will scatter from their work or holding areas back to their homes. What’s needed for economic revival is the opposite: For workers to return to work and resume productive activities. But this may be unrealistic to expect after the loss of confidence from the shocks of the peremptory lockdown, the deprivation of livelihood, and of food and shelter.

Other stranded people who have the means also need the right to move freely while maintaining prudent constraints. Indians abroad are being flown home; Indians in the country need facilitation too.

Next on the list is restarting the economy by ending the forced closure of productive activity for compensation, spending for products and services, and of economic flows. Recall that before the lockdown, we had a monumental late-payments problem, namely, the non-performing assets (NPAs) of the banks and financial institutions. While there has been considerable scrutiny of the NPAs and fraudsters, much less attention is directed at a major component — that is, late payment of dues and refunds by government and its agencies. These encompass all payments, such as to state and private electricity generators and distributors, airlines, hotels, restaurants, manufacturing companies and service providers, and all refunds of taxes, including goods and services tax (GST) and customs duties.

This aspect escapes corrective action despite its magnitude, although it is remediable through decisive action. It has to be resolved through executive intervention, because it is a precursor and cause of a significant proportion of NPAs. Among larger commercial enterprises, late payments are a problem for some countries more than others, as seen in the heat map for 2018 by Euler Hermes, a trade credit insurance company (see chart). Surprisingly, India has a reasonable rank of 24 out of 36 countries, and its average at 67 days is close to the overall average of 65 days. Also, 25 per cent of corporations paid before 30 days, although another 25 per cent paid after 96 days. China had the highest average at 92 days, followed by Greece, Italy and Morocco.

However, smaller enterprises suffer considerable delays, as represented to the finance minister before the Budget recommendations in January this year, because their receivables take months to clear.

The biggest problem is not reflected in the chart: It is in delayed government payments and tax refunds.

All the delays have a cascading effect resulting in NPAs. For instance, Nasscom complained in 2017 that overdue payments from central and state governments and public sector undertakings for IT projects amounted to nearly Rs 5,000 crore. A survey is under way on the present status. Another example is delayed subsidies to fertiliser manufacturers that are notorious for creating cash flow crises. A third example is large dues and contested payments owed by the National Highways Authority of India (NHAI). In August last year, the NHAI was the focus of an effort by the Prime Minister’s Office (PMO) to clear its enormous debt overhang, and its contested dues.

Yet, the government resists timely payments even towards public sector dues, while being remorseless with its charges and collections. It is as though there is no understanding of cash flows, except perhaps for election funding. Overdue government payments are an obvious starting point to clear NPAs and create confidence through liquidity, emulating what is already practised here by India’s best corporations.

Another inexplicable impediment is the totally conflicted approach to information and communications technology (ICT). As the past two months have shown, reviving and remodelling our economy depends on effective digitisation and communications for two streams. One is for more efficient production and service delivery in all areas, such as agriculture, dairy farming and horticulture, and so on, as well as finance, manufacturing, trade, logistics, tourism, and in compliance. The other is in functioning in an altered paradigm that depends on effective support for remote working. Yet, telecom companies and high-tech manufacturers are beset with overdue payments on the one hand, while the former are crushed by government charges and retrospective demands. Meanwhile, a failed approach of high-priced spectrum auctions continues, while the most elementary and logical regulatory reforms for wireless broadband are ignored, such as enabling 60GHz and other spectrum bands discussed below.

Is it possible that the authorities do not understand that without wireless reforms, India is just holding itself back, or are they simply not acting on what they know? Consider what other countries are doing to improve productivity. Last month, America opened up the entire 6GHz band consisting of 1,200MHz of spectrum for unlicensed use for faster Wi-Fi.1 Licensed primary users of microwave for backhaul, utilities, and public safety were protected. The EU countries are likely to follow soon. For India, following this lead for Wi-Fi is a foregone conclusion. Dithering because nobody in power cares to even follow feasible measures wisely will only hold India back, as in disallowing the use of unused spectrum bands (60GHz, 70-80GHz, and 500-700MHz).2

If only the PMO would task appropriate authorities to consider permitting the use of four bands, namely, 60GHz, 70-80GHz, 500-700MHz, and 6GHz, the likelihood of better connectivity for high-speed broadband countrywide would greatly improve. The first three bands would be for licensed operators excepting indoor use of 60GHz, and the fourth would be for Wi-Fi. Such action will comply with the Supreme Court’s requirement of having public-interest policies in place for not auctioning spectrum.

Acting on cash flow plus connectivity, both initiated by the government, can effectively kick-start the economy.

For more details visit https://cis-india.org/telecom/blog/kick-start-the-economy-with-cash-flow

High priced restrictive entry, distorted regulations make India's telecom sector unattractive

Rekha Jain — 2020-05-20T08:43:38Z

In the wake of COVID-19, the PM has emphasized the opportunity to attract FDI by transforming the business environment and urged policy makers to ease the way business is done.

This article first appeared in the Economic Times on 17 May 2020.

In the wake of COVID-19, the PM has emphasized the opportunity to attract FDI by transforming the business environment and urged policy makers to ease the way business is done. The current configuration of broken supply chains and the problem arising from dominance of China in many sectors provide a space where investments in India look attractive.

The obvious question that arises is why not take this opportunity to review the policy and regulation for domestic players ? The need to focus on sectors like telecom that are the bedrock of the knowledge and service economy is critical. This is a sector where Indian businesses have scale (each of the private operator has more than 325 mn subscribers.) and yet only a single private operator of the three seems to be doing well. In no other part of the world, the sector as a whole is under stress. And remember this stress was there long before COVID -19.

This situation was caused not only by the entry of a new operator Reliance Jio, with an all IP network designed and optimized for data usage and a business model optimized for data, but also because of legacy policy and regulatory issues that affected the two older operators, Bharti Airtel and Vodafone Idea more. It is a fact that businesses must bear the consequences of disruptive challenges from new entrants with new technologies and business models. But when policy and regulatory framework cause sectoral disruptions, then these need to be rectified. This is more important in core infrastructure sectors such as telecom.

Given the rapid pace of technological developments and their effect on the economy, the telecom sector, more than any other sector, needs to have a policies that facilitate growth and are in coherence with global trends. The following will illustrate how much catching up India has to do.

A recent news item highlighted that China has installed a 5G network on Mt Everest not only to facilitate communications but also to gather data for research. When we also consider that in many countries, operators have not only been allocated spectrum for 5G networks, they have initiated deployments of such networks, the contrast with India is obvious. In India, 4G coverage is patchy, including in metros. With so much financial stress in the sector, 5G spectrum auctions do not invite a lot of excitement in the two private operators and auctions for 5G are likely to be delayed yet again.

A large part of the financial distress was caused by the penalty and interest payments on license fee and Spectrum Usage Charges (SUC) that are linked to AGR and high spectrum prices paid in 2016. While operators were responsible for devising appropriate mechanisms for managing the outflows due to the AGR issues, the question to ask is, should the DoT have come out with license conditions that are onerous? Just because it has the right and authority to do so, should it do so? Should it take the operators nearly 15 years to seek a review of the license conditions, as the matter goes between TRAI, TDSAT, DoT and the Supreme Court? Should DoT, as the policy maker be filing cases against TRAI and TDSAT? Should these arms of the government not be working in coherence?

Besides these structural issues, the policy framework has deeply embedded anomalies arising out of legacy issues and the orientation of policy makers is to not only continue with them but twist themselves in Gordian knots around them. For example, the SUC was imposed prior to 2012 when the spectrum and service licenses were bundled. But despite unbundling of the latter, this charge continues. This is despite several studies and representations seeking its revocations. A recent TRAI consultation paper (SUC for spectrum trading, April, 2020) highlights, how even regulatory agencies spend so much time in refining such distortions, rather than advocate for its removal.

Even when DoT proposes forward looking market instruments, such as spectrum trading, it distorts the underlying principle of allowing the market to function by over-specification of regulatory parameters such as units in which spectrum may be traded, geographic limits and imposing liability of past dues on the buyer (even when several SC judgments in other sectors have ruled otherwise). Regulation of new technologies and new instruments, it is necessary to start on a clean slate based on certain principles of openness and fairness rather than on legacy parameters.

Should Indian businesses not have a right to a streamlined, forward looking policy environment? Examples from the telecom sector merely highlight a deep malaise in our decision makers that is more broadly prevalent. Should the accountability of the executive not be based on outcomes for the sector such as investments generated and quality of service vis-a- vis global benchmarks? (Despite all the talk about growth of mobile Internet, we continue to have among the lowest upload and download Internet speeds globally). Another benchmark could be how much spectrum was DoT able to make available for commercial use? Timely and appropriately priced spectrum and removal of distortions exemplified above will see these parameters go up and there will be consequent increase in service and corporate tax for the government. High priced restrictive entry and distorted regulation make the sector very unattractive.

Even if businesses wish to move away from China, there are alternatives besides India available to them. That is why, streamlining our policy environment in all sectors to enable Indian enterprises to flourish should be the first step in attracting FDI.

(The author is Principal Advisor at Broadband Forum of India)

For more details visit https://cis-india.org/telecom/blog/opinion-high-priced-restrictive-entry-distorted-regulations-make-indias-telecom-sector-unattractive

Short on Spectrum: Need for an enabling policy and regulatory environment

Rekha Jain — 2020-05-20T08:38:21Z

This article first appeared Tele.net in March 2020.

Internet and telecom are the key drivers of economic growth. India has the potential to become the largest internet-using country after China, with current estimates showing that five to seven million mobile internet users are being added and about 35 million smartphone shipments happen every quarter in the country. The huge demand for mobile broadband requires adequate spectrum and capacity in radio access networks. Further, due to poor fibre connectivity, estimated at only 15-20 per cent of the existing towers, backhaul spectrum availability is critical.

Given the growth driver of telecom and internet in India is mobile, a critical resource for sector growth is spectrum – the only natural resource that is equally endowed across all nations. However, in India, operators and citizens are spectrum starved. There is a need to introspect why that is so. Further, with an economy on the rise that places ever higher demands on telecom services, the sector should have a growth trajectory that surpasses others. However, the Indian telecom sector story is that of the proverbial killing of the goose that lays golden eggs.

In the current scenario, there are three private sector operators – Bharti Airtel, Vodafone Idea and Reliance Jio – and public sector entities Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL). BSNL and MTNL have a declining market share of 10.5 per cent and hardly any 4G services as they were not allocated spectrum for it. As of November 2019, the teledensity stood at nearly at 88.9 per cent, urban being 157.3 per cent and rural being 56.7 per cent. Mobile services contributed to nearly 98 per cent of the urban and nearly 100 per cent of the rural teledensity.

Vodafone Idea and Bharti Airtel are under tremendous financial stress, caused by accumulated losses of more than Rs 2.2 trillion that include due payments of revenue share (based on adjusted gross revenue [AGR]) due as a part of their licence fee, penalty and interest payments for delayed payments to the Department of Telecommunications (DoT), high prices paid in auctions for spectrum in 2016 and business disruption following the entry of Reliance Jio. To put the numbers in perspective, the entire revenue for the sector was Rs 2.11 trillion for 2017-18. Given the current poor financial situation of the private operators, the government had to delay the auction of 5G spectrum as most private sector operators are not in a position to bid for new spectrum and also invest in the new networks required. A major concern for policymakers is that there could be a significant reduction in competitiveness and consumer choice as there is a possibility that Vodafone Idea may exit the sector, given its weak financial state. Since BSNL and MTNL’s market share is very low and is not likely to grow significantly, the telecom sector could effectively have a duopoly.

What has caused the telecom sector to be in this state? While the private sector’s strategies and actions have contributed to the current situation, a major portion of the responsibility is due to the restrictive policy and regulatory environment in which the sector has operated. While the private sector must contribute to paying its dues for using a public resource (spectrum or right of way) for private gains, overly restrictive licence conditions, a constrictive environment for making more spectrum available from DoT and infeasible pricing of spectrum recommended by the Telecom Regulatory Authority of India (TRAI) could make the sector unviable. I would like to highlight some key concerns that could be addressed in the short term.

AGR

This is exemplified in the basis for AGR calculation that included total income from both activities that require a licence such as provision of telecom services and also that do not such as interest income and equipment sale. AGR forms the basis of licence fee and spectrum usage charges (SUC). While the licence explicitly identified all components of AGR and telecom operators accepted the licence conditions when they signed the licence, and must bear the consequences of the same, it is difficult to understand the logic of DoT in coming out with such conditions. It is true that the government has a sovereign right to specify any condition, but an enlightened and long-term view would indicate that it is not in the interest of the sector to have restrictive conditions.

Another such example is the legacy of SUC that originated when service and spectrum licences were bundled. Since these have been unbundled, there is no longer any requirement of SUC, which constitutes a significant outflow (3-5 per cent), as operators pay a licence fee for the spectrum. This is double charging and unfair. While DoT may be concerned that the removal of SUC would lead to lower revenue for the government, new services, higher adoption of existing services and the corresponding increase in service tax and corporate tax should more than compensate for it. Further, government dues on licence fee and SUC have come down, as the AGR of two of the private operators has come down.

Spectrum availability

Compared to several other countries, India has a relatively constrained supply of spectrum for commercial use, both in the unlicensed and licensed bands. In a spectrum-starved country such as India, where each operator gets about one-fourth of the licensed spectrum as compared to operators in other countries, making more bands both licensed and unlicensed bands available unleashing the potential of unlicensed spectrum is important.

Licensed spectrum

Often operators have not bid when licensed spectrum was made available in auctions. This has been due to the arbitrary and high reserve prices set by TRAI. These are high in comparison to those in several developed countries. Lower propensity to pay and higher competition levels in India (with a peak of 12-14 operators per service area until 2012 and nearly five operators until the recent spate of mergers), and lower amount of spectrum per operator is a recipe for financial stress of the companies. TRAI has a peculiar and unique practice of setting the reserve price in any auction the same as the winning price in the previous auction and when it is a new band or recent auctions have not been held in existing bands, some arbitrary multipliers on the nearest band’s winning price are used. Despite the failure of the 2016 auctions, where bands that are globally in high demand had no bids, TRAI once again set very high reserve prices for the 3.3-3.6 GHz in its recommendations in 2018. After several iterations between DoT and TRAI on reconsideration of prices, TRAI announced that it had reduced them by 43 per cent. Even after this arbitrary reduction, prices continued to be much higher than those in the developed countries where such spectrum had been auctioned.

Unlicensed spectrum

India has around 660 MHz of spectrum available for unlicensed use, spread across various spectrum bands. In comparison to other countries (the US 15,403 MHz, the UK 15,404 MHz, China 15,360 MHz, Japan 15,377 MHz and Brazil 15,360 MHz), this is significantly less. There is a perceived reluctance on the part of DoT to make more spectrum licence-exempt, largely because of a narrow interpretation of the Supreme Court judgment (2012). According to this perspective, the Supreme Court had mandated the allocation of spectrum only through auctions. However, a more informed reading and interpretation indicate that the Supreme Court, in its judgment, had referred to spectrum allocation as a policy decision within the purview of the executives. In a subsequent Presidential reference made by the government, the apex court had elaborated that the scope of the judgment was limited to 2G spectrum distributed on a first come, first served basis during 2007-08. Further, any alienation of scarce public resources needs to be done in a fair and transparent manner, backed by a social or welfare purpose. In the case of unlicensed spectrum, since there is no need to allocate spectrum specifically to any user, there is no contention regarding the choice of the allocation method. By not adopting clarifications in the judgment and the Presidential reference, DoT has delayed spectrum allocation in different bands, including unlicensed bands.

Conclusion

The above examples indicate the restrictive policy regime that has characterised private entry into the sector since its inception. There have been instances in the past, such as a shift from a one-time entry fee to a revenue sharing regime or moving to a technology-and service-neutral licence, where the government has shown how an enlightened policy perspective that could enable services to take off. A similar approach that views the private sector as a partner in growth (with relevant provisions to prevent abuse) and enables competition to bring in consumer choice, innovation and reasonable pricing will see services take off.

While the private sector must take a long-term perspective of what drives the growth in the sector and not just seek redressal through short-term measures, the onus on the government is much higher. It is the one that sets the agenda and has a vision of what kind of development citizens have a right to. So far, given the current state of the telecom sector, the government needs to push for a long-term enlightened policy agenda that will provide world-class services to its citizens and increase India’s competitiveness. I also hope that policymakers will recognise that 512 kbps should not qualify as broadband speed (which it is, by current definitions).

If we aim low, we cannot achieve high growth.

For more details visit https://cis-india.org/telecom/blog/short-on-spectrum-need-for-an-enabling-policy-and-regulatory-environment

What BharatNet can learn from the rural-roads scheme: involve states, local bodies, private sector

Rekha Jain — 2020-05-20T08:12:21Z

BharatNet appears to be foundering. It has a top-down approach with little involvement of the states, implementing agencies, or vendors. In contrast, PMGSY, considered a success, works in a bottom-up manner. Its implementation mechanism involves a dedicated agency from the user ministry, PWD, rural-road development agencies, gram panchayats, private operators, etc.

This article first appeared in ET Prime on 13 Feb 2020.

With the Internet increasingly becoming the driver of economic growth and considering its poor penetration in rural India, the government came up with the National Optical Fibre Network (NOFN) project in 2012.

It was an ambitious programme to provide high-speed connectivity to 2,50,000 gram panchayats (GP) by 2015. NOFN was designed to incrementally provide the fibre from the sub-district to the GP, as it was presumed that the state-owned Bharat Sanchar Nigam Limited (BSNL) already had fibre connectivity up to the sub-district level.

A special purpose vehicle (SPV) called Bharat Broadband Networks Limited (BBNL), a wholly owned government of India enterprise under the department of telecom (DoT), was set up for implementing NOFN. It was envisaged that it would lease existing bandwidth from BSNL, PGCIL, and Railtel — each allocated a specific state, with BSNL having more than 80% share. After the provision of end-to-end connectivity, BBNL would provide non-discriminatory access to all Internet service providers (ISPs), telecom and cable service providers, and other retailers, and enable the extension of mobile broadband. To facilitate the ROW (right of way) rules, BBNL had tripartite agreements with the state governments and the executing agency for that state.

A tale of missed targets

Despite recognising the role of broadband network that would “transform governance, service delivery, and unleash local innovation capacity through rural broadband”, NOFN missed its targets by wide margins and was extended several times. Its architecture was changed to provide redundancy and a more-ambitious project called BharatNet was envisaged with a cost of INR42,068 crore.

In the BharatNet model, states could also lead and implement the initiative. By December 31, 2019, BharatNet had missed both phase I and phase II targets by a huge margin. Only 50% of the GPs were service-ready. Further, the utilisation of the infrastructure was very poor, with only 15,000 GPs having Wi-Fi connectivity.

Several reasons, including the following, have been cited for this failure.

BharatNet was designed as a top-down scheme of the DoT with little involvement of the states, implementing agencies, or vendors. The proposed network architecture that relied on BSNL’s existing fibre was an issue. In several places, the fibre was not available or not in good condition. The decision to implement NOFN/BharatNet only by state-run enterprises (BSNL, PGCIL, and Railtel) caused several delays due to the inefficient management process —a characteristic of the PSUs. The initial focus was only on providing connectivity the GPs without considering the last-mile connectivity options for the end-user. There was little involvement of the states. Often the agency or the GP, where the connectivity terminated, was not aware of the applications for which they could use the connectivity. No separate project-monitoring organisation was put in place.

BBNL’s functioning was constrained by the fact that it operated within the framework of DoT. It had little operational autonomy and processes for adopting a different approach. The scope for BBNL was further reduced as some of the states, such as Andhra Pradesh, Kerala, and Gujarat, opted to take on this role themselves, citing the slow progress of BharatNet.

Lessons from PMGSY

When we compare the poor outcomes of BharatNet with the Pradhan Mantri Gram Sadak Yojana (PMGSY), one of the transformational development schemes and a key achievement for the government, the question one should ask is: are there some lessons that can be learnt from PMGSY? Though delayed from its earlier target date, PMGSY is set to achieve its deadline. The scheme was initiated by the rural development ministry (MORD) in the year 2000. With an outlay of USD35 billion, it had an objective of connecting all eligible rural habitations having a population of more than 1,000 in three years and all unconnected habitations with a population of more than 500 (in hill states, deserts, tribal areas, and backward districts) by 2007.

PMGSY started as a 100% centrally sponsored scheme financed through cess on high-speed diesel of INR0.75/litre. From 2015, the contribution pattern for financing changed to 60:40 for the centre and state, respectively, and 90:10 for the hilly and backward states. By 2019, it had covered more than 97% of the eligible habitats. Based on the success of the roll-out, the programme was expanded to cover all habitations with a population of more than 500. Given the rapid progress, the completion date was advanced to March 2020 instead of the original date of 2022. As was to be expected, PMGSY has transformed the socio-economic scenario in rural India.

The ownership for deployment of rural roads lies with the National Rural Roads Development Agency (NRRDA), which was later renamed as National Rural Infrastructure Development Agency (NRIDA). The agency reports to the rural development ministry. Its objective is to provide management and technical expertise to various states for implementing PMGSY. For technical aspects of road design, NRIDA works with state PWD and other agencies.

Rural roads are selected and prioritised in a bottom-up manner across villages, blocks, district, and the state. Objective methods to prioritise road selection, standardised processes for engineering, design and contract execution, coupled with independent quality monitoring and in-built maintenance in civil contracts were critical to project outcomes. More than achieving the physical targets, PMGSY has brought about a fundamental shift in the way rural roads are mapped, designed, monitored, and built. This led to several states to adopt the PMGSY model in their state-level rural programme. With time, the focus has shifted to low carbon and green designs, using climate-resilient techniques.

Given the possible transformational potential of a broadband connectivity to GPs, some learnings from PMGSY that DoT can consider are:

User involvement in design: Since rural telecom connectivity enhances socio-economic development, user agencies and the rural administrations are in a position to identify their demand and requirements. Given that new technologies have the potential to create new applications which a layperson may not be able to identify, there is also a need to meld this with an appropriate top-down design that leverages the technology potential. This model has worked well for PMGSY. While the village-level committees prioritise road development, Central Road Research Institute and other research organisations specify the design parameters, taking into account the local context.
Multi-functional/cross-organisational committees for design and implementation: A large project such as NOFN/BharatNet necessarily requires involvement of a number of agencies — state governments, and district, tehsil, and village administrations. While designing a telecom network requires professionals with telecom background, the success of such a project necessarily depends also on the management and collaboration processes at all levels of administrative hierarchy. However, DoT did not involve any state-level agency in the design of the network. The NOFN/Bharatnet is being implemented by BSNL/PGCIL/Railtel with their state-level units. On the other hand, PMGSY’s organisational structure involves the newly created separate agency — NRRDA/NRIDA and the SRRDA, PWD, rural-road development agencies, gram panchayats, private operators, etc. These agencies are involved in rural-road planning, sectoral coordination, funds, contracts, and maintenance management. While the state-level units of BSNL may be also doing similar activities, the fact that the design, implementing, and monitoring agency is bundled into one in the case of BharatNet, leading to a lack of transparency and diffused accountability for targets.
Private sector participation: BharatNet is being implemented only by PSUs that were given the responsibility on a nomination basis. The costs for a PSU are higher due to the inefficiency in management. For PMGSY, road works are awarded on a bidding basis, thus leveraging the efficiencies of the private sector. A concern that could arise in involving the private sector may be the loss of quality. The specification of standards, a five-year maintenance contract as a part of the construction project, and independent monitoring mitigate this aspect.
Ring-fencing USOF: While telecom operators pay 5% of their adjusted gross revenue towards Universal Service Obligation Fund (USOF), the amount is transferred to the Consolidated Fund of India. Allocations are then made on a demand and review basis. So, despite the unspent balance of nearly INR50,000 crore in USOF, there has been delay in its implementation. On the other hand, the rural-road fund is ring-fenced and is funded through cess on high-speed diesel and petrol. Ring-fencing enables smoother flow of funds
Partnering with PMGSY: : The NOFN/BharatNet should have partnered with PMGSY. Laying the ducts and fiber while the PMGSY roads were being constructed would have increased the PMGSY cost by a small amount. This incremental cost would then have been much smaller than the cost of laying fibre afresh. This would have also streamlined the ROW permissions etc. — something that has often delayed NOFN/BharatNet implementation. The nation, then, could have a more widely dispersed fiber network at a much lower cost.

Clearly, the organisational mechanisms associated with USOF require a thorough and quick review.

The author is a visiting faculty, IIM Ahmedabad, and former executive chair, Idea Telecom Centre of Excellence, IIM Ahmedabad

For more details visit https://cis-india.org/telecom/blog/what-bharatnet-can-learn-from-the-rural-roads-scheme-involve-states-local-bodies-private-secto

Why India functions the way it does

Shyam Ponappa — 2020-02-10T17:51:46Z

Ever wondered who gains from the way we work?

The article was originally published in Business Standard on February 06, 2020, and mirrored on the Organizing India blog.

It’s not obvious why we function the way we do in India, and who gains from it — considering that we are able to go just about anywhere in the world and thrive, but unable to manage too well on our own shores. Could it be because of the operating conditions here apart from the facilities, the prevailing systems and procedures in our environs, and the organisation, structure, and processes? When we go elsewhere, those places have their own systems and procedures, and it appears we are able to adapt and function well. In India, our constraints of systems and procedures in our environs include the full range of our population, just as elsewhere. The sheer number of people with varied levels of education, competencies, process orientation, and expectations is something that those who go away to other environments are not constrained by.

There are other easily recognisable elements of constraints. There are the post-colonial institutions, structures and methods that have been retained in government without modification for a self-governing, democratic society. Another set consists of the underpinnings of a feudal structure that manifests strongly in political processes. The predominant motivation of both is, to put it crudely, exploitation for the governing entity’s gain. Historically, the gain has been for imperial/colonial/exploitative ends, and after the first, largely well-intentioned post-Independence phase, appears to be focused on perpetuating the power of incumbents, or the position of those controlling government (barring exceptions). The fact of governing entities being locally elected does not appear to make any difference. The essential attribute is of otherness, of “us” (those in power) versus “them” (those governed).

The Laws and the Justice System

Latterly, our preoccupation with economic, social, and political pressures has left the serious institutional constraints of our legal system somewhat unattended. There are several dimensions of reforms needed in the legal system. One of these pertains to aspects of law and changes to them, another to the judicial system and its dilatory responses. There is also a third aspect, of approach and motivation, i.e., of a systemic perspective and philosophy, which can be minimalist or the opposite, or something in between.

Too Many Laws

A major encumbrance is the plethora of laws. In December 1993, the Ministry of Finance undertook a project with the United Nations Development Programme on economic and commercial legislation, to make it more market friendly. Called Project LARGE (Legal Adjustments and Reforms for Globalizing the Economy), the first phase from December 1993 until December 1997 dealt with central government legislation comprising about 450 of around 3,000 central acts. The second phase was on state legislation concentrating on government orders, rules and regulations relating to land and labour, and other matters such as dispute resolution and competition policy.

While the material is in the public domain, in practice, it is a bear to find it. For those who want to track it, the reports were published in September 1998 as the “Report of the Commission on Review of Administrative Laws”, Volumes I and II.¹ Three articles by the Director of Project Large Bibek Debroy sum up the process, including the later work of the Ramanujam Committee and successive Law Commissions. They are epitomised by his quotation of Tacitus: The more the corruption, the more the laws. The articles are:“Why We Need Law Reform”, “Justice For All: Need Better, Fewer Laws”, and “Old But Not Gold” (links below).² Another by Vagda Galhotra rounds out the set: “Why We Need To Repeal More Criminal Laws”.³

Too Much Government Litigation

Government litigation expenditure increased threefold from 2016 to 2018, with government being a party to around 46 per cent of lawsuits in July 2018, despite its stated intent of reducing litigation. Quite apart from this, government litigation and some of the disruptive rulings have created chaotic conditions in the economy, such as in coal mines and spectrum after the 2G licence cancellations. This has had a chilling effect on policies facilitating resource use, whether it is coal for electricity, or spectrum for connectivity at a time when there is global advancement in high-speed wireless shared use. The most recent shock to India’s economy was the Supreme Court’s reversal of previous rulings on telecom companies’ adjusted gross revenues. Other disruptive claims, without going into the merits, have been the retroactive tax case against Vodafone, the Tamil Nadu government’s tax claim against Nissan, and the earlier dunning of Nokia.

In 1998, there were an estimated 25 million cases pending in various courts, each taking up to 20 years for resolution, and this increased between 2006 and April 2018 by over 8 per cent. Much of government litigation apparently comprises appeals against lower court judgments, with decisions to appeal taken at the lowest levels of government, whereas decisions to not appeal have to be at the top.

There are many areas we have to work on to move from our present level to being able to grow at a sustainable high rate for any length of time. Beginning from early school, with systems thinking for every child, process discipline and standards, and collaboration and teamwork in lesson plans and play, continuing into work life and polity. Equally, there is a real need for establishing sound institutions. Included in these is a functioning, efficient set of laws and justice system. The discipline and efficient enforcement of contracts, payment terms, and delivery standards to ensure smooth cash flows is critical for markets to function well. This is why reforms on systematic rationalisation of the laws and justice delivery are essential, although such activities do not lend themselves to hoopla and staging events with popular appeal. The talent and experience availablecan contribute significantly to systems and organisation in the public interest. The constitution of the 22nd Law Commission is long overdue, with the 21st Law Commission having ended in August 2018.

1: https://darpg.gov.in/sites/default/files/Review_Administrative_laws_Vol_1.pdf

https://darpg.gov.in/sites/default/files/Review_Administrative_laws_Vol_2.pdf

2: https://www.india-seminar.com/2001/497/497%20bibek%20debroy.htm

https://indianexpress.com/article/opinion/columns/old-but-not-gold/

https://www.businesstoday.in/magazine/cover-story/justice-for-all-need-better-fewer-laws/story/227497.html

3: https://thewire.in/law/why-we-need-to-repeal-more-criminal-laws

For more details visit https://cis-india.org/telecom/blog/why-india-functions-the-way-it-does