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The Internet and Mobile Association of India (IAMAI) that represents internet and technology companies, said that the draft telecom bill should limit the scope of telecommunication services to those that control or distribute spectrum for utilization rather than expanding the scope to include entities that utilize the airwaves, so as to allow innovation and further enable India's burgeoning start up ecosystem.

In a letter to the telecom department, the association flagged concerns against licensing provisions in the bill which it said would creating entry barriers that will be detrimental to small businesses.

"Creating room for licensing provisions applicable to over-the-top service providers presents an existential threat to India’s start-up ecosystem by creating herculean barriers to entry. Not only would this mean that aspiring Indian start-ups which are still evolving and developing their business and monetization models will risk massive compliance costs in their infancy, but also would mean that foreign investors bullish on Indian start-ups may experience a chilling effect owing to the drastic policy uncertainty," the association said Friday.

"The time-tested distinction between telecom spectrum-controlling entities and spectrum-using companies should be maintained as it has been the basis that has allowed innovation and deeper penetration of the internet in India," it added.

It said that part of the telecom infrastructure industry has sought for creation of revenue -sharing mechanisms for ‘Over the Top’ (OTT) layer within the ambit of the bill, alluding to the Cellular Operators Association of India (COAI) but not naming it.

Telcos have sought for licensing framework for OTTs that use its network in order to bring the apps at par with carriers, besides a share of revenues of the OTTs for the usage of airwaves. Telcos have said that OTTs ride on the telco networks and offer voice, video and messaging services, yet are neither subject to the regulations or rules that telcos are despite offering the same services, nor are they subject to taxes or levies from the government and do not pay telcos for using their data streams.

IAMAI said that equitable contributions from stakeholders within the OTT layer, which would only seem to strengthen the gatekeeping abilities of the owners of the infrastructural layer on which OTT services operate. These changes would only establish additional sources of revenues for well-established sectors while leaving the start-up ecosystem vulnerable to compliance costs even when they may be pre revenue.

"The implications of this move would be as far-ranging as they would be devastating," it said on Friday, adding that it had expressed its grave concerns to the DoT in its submissions on the draft bill.

Data released by the Union Ministry of Electronics and Information Technology (MeitY) shows that India’s digital economy has grown tremendously over the past decade, generating over 200 billion US dollars of economic value each year. Integral to this growth has been the compartmentalisation of legislations regulating carriage and content. By regulating carriage and content separately, India has enabled the growth of both OTT service providers as well as traditional telecommunication service providers.

IAMAI also sought to illustrate the success of the extant regulatory framework facilitated the creation of 100+ unicorns and 200+ billion dollars of growth, achievements which have enabled India to aim for a 1 trillion-dollar digital economy.

It added that despite this astronomical growth that has allowed India to leapfrog into becoming a global start-up hub, the recently concluded consultation on the Draft Telecom Bill betrays either a willful misinterpretation or a fundamental lack of understanding of how the digital economy works.

ABOUT THE AUTHOR

Gulveen Aulakh

Gulveen Aulakh is Senior Assistant Editor at Mint, serving dual roles covering the disinvestment landscape out of New Delhi, and the telecom & IT sectors as part of the corporate bureau. She had been tracking several government ministries for the last ten years in her previous stint at The Economic Times. An IIM Calcutta alumnus, Gulveen is fluent in French, a keen learner of new languages and avid foodie.
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