New telecom bill set to approve administrative allocation for satellite broadband services

  • The government will allocate satellite broadband spectrum, mandate biometric authentication of new telecom users and wield the power to take over telecom networks at times of war, the new bill tabled in the Lok Sabha proposes

Gulveen Aulakh, Shouvik Das
Updated19 Dec 2023
The government is likely to table the Telecommunications Bill 2023 in Lok Sabha on Monday. (File Photo)
The government is likely to table the Telecommunications Bill 2023 in Lok Sabha on Monday. (File Photo)

The Union government will allocate satellite broadband spectrum, mandate biometric authentication of new telecom users, regulate encryption standards for internet communications and wield the power to take over telecom networks at times of war, the new telecom bill tabled in Lok Sabha proposed.

The long-awaited bill, which replaces three existing laws—the Indian Telegraph Act of 1885, the Indian Wireless Telegraphy Act, 1933, and the Telegraph Wires (Unlawful Possession) Act, 1950—however, kept messaging apps outside its purview and did not seek to dilute the powers of the telecom regulator, as proposed in the draft legislation.

The government will allocate satellite broadband spectrum instead of auctioning it, a move that will help Bharti Group-backed OneWeb, Reliance’s Jio Satellite Communications, Elon Musk’s Starlink and Amazon’s Project Kuiper launch services quicker. The government will issue a global mobile personal communication by satellite (GMPCS) licence for such services.

Spectrum for satcom services as well as 19 others including TV broadcast, direct-to-home (DTH), national long-distance calling, maritime and in-flight connectivity services can be allocated outside auctions, according to the first schedule of the Telecommunication Bill, 2023, tabled by telecom minister Ashwini Vaishnaw.

This is the first time since the Supreme Court (SC) judgement on the 2G scam where allocation of airwaves outside of auction has been decided by the government. To be sure, administrative allocation has been the norm for services such as Very Small Aperture Terminal (VSAT).

“There is now clarity in law,” a government official close to the decision-making said. “Auction is the primary mode of giving out spectrum, but there are certain cases like government functions of law enforcement, public interest functions like airlines, and where technically or economically auction is not feasible, like satellites where the same spectrum is to be used by multiple entities like OneWeb, Starlink, etc., and therefore cannot be auctioned,” the person said on condition of anonymity.

“The pricing of this spectrum and the methodology of allocation will be decided by the Telecom Regulatory Authority of India (Trai). In the presidential reference to the SC on the 2G spectrum judgement, it was clearly mentioned that the SC was not the body which can decide what should be the right way of allocating natural resources. The court had also said that the best possible and scientific way should be used,” the person said. He added that the bill will remove the need for ad hoc allocation, which has been done for over 4,700 licences so far.

The industry welcomed the proposal to allocate spectrum. “By allocating the spectrum by the administrative method for satcom, India could align itself with international standards, promote global cooperation and also help drive innovation, create opportunities for startups, and strengthen the country’s position in the global satellite market,” said Anil Kumar Bhatt, director general, Indian Space Association.

“The bill brings tremendous clarity to the sector even from the overall digital economy point of view. It is a clear step forward for the overall sector, and will boost both domestic and foreign investor confidence. FDI in telecom and associated sectors will grow as a result, and it’ll also work in great benefit for the end-consumers.” said T.V. Ramachandran, president, Broadband India Forum.

The bill also keeps apps such as WhatsApp, Telegram and Signal outside its purview.

“OTT will be regulated by the ministry of electronics and information technology; the carriage will be dealt by the telecom bill, and content will be regulated by the information and broadcasting ministry, in accordance with the allocation of business rules,” the person cited above added.

Telecommunication services has not been defined, which the draft bill had defined to include data calls and OTT communication, and hence the issue of OTT regulation. The government is also drafting the Digital India Act, for which consultations are ongoing, but it would be taken up for execution by the next government.

The bill proposed to take back unutilized spectrum from private as well as government entities, but this will not apply to entities such as Aircel and Reliance Communications undergoing insolvency. “The cases under the Insolvency and Bankruptcy Code are very complicated; so they’ve not been included,” the person added.

The Internet and Mobile Association of India (IAMAI) hailed the bill for keeping internet companies out of its ambit. “The time-tested distinction between telecom spectrum controlling entities (which are regulated) 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 said.

Another key draft proposal to curtail Trai’s powers was dropped from the final bill. Separately, amendments were made to the conditions for appointing its members and chairperson, allowing non-government officials to be eligible for chairmanship if they have 25 years of experience.

Biometric verification of new telecom users will be mandatory, a move to prevent SIM-based fraud. “Data privacy rules under the DPDP law (Digital Personal Data Protection Act, 2023) will be applicable on telcos in this case,” the person cited earlier added, noting that existing users would not need re-verification.

Some experts cautioned against the provision of internet shutdowns and interception under Clause 20(2), which, as per the broad definition, may govern platforms such as WhatsApp and Google Meet.

“The clause does not lay down clear safeguards against the misuse of this power in the bill itself, but instead leaves it to rules that may be prescribed. Weak safeguards could adversely impact freedom of speech,” said Sumeysh Srivastava, senior manager at The Quantum Hub, a public policy firm.

The bill empowers the government to notify standards and conformity assessment measures for equipment, services, cybersecurity for these services and networks, and ‘encryption and data processing in telecommunication’.

“Regulation of encryption standards may result in weakening of encryption and the same may be a cause of concern to privacy,” said Manmeet Kaur, a partner at law firm Karanjawala & Co.

However, the person mentioned earlier said the rules of lawful interception have not been changed and remain as they were in the previous law.

The bill also allows the government to take control of the telecom networks in case of exigencies such as war.

The draft telecom bill issued in September 2022 had proposed for allowing write-off or deferment of dues in cases of payment default in extraordinary circumstances, and had proposed that if a telco undergoes insolvency and intends to shut down or suspend operations but continues to provide services, does not default in payments and complies with modified terms and conditions, the government can assign another person or entity to manage the operations for a certain period of time. These provisions did not make it to the final bill.

The bill allows government to prohibit the use of telecom gear that may not be from trusted sources, in the interest of national security. Critical telecom infrastructure will be protected by law and vandalism will attract penalties.

“The bill provides extensive powers to the central government on matters such as predatory pricing, sending of commercial communications through ‘specified messages’, encryption and data processing etc. However, there are separate regulations and regulators governing each of these aspects, so it is important to see that there is no overlap between Department of Telecommunications with other regulators such as Competition Commission of India, Trai, Ministry of Electronics and Information Technology, etc,” said Harsh Walia, a partner at law firm Khaitan & Co.

Unauthorized access to telecom networks, or in other words, hacking into networks or gaining data through unlawful means, could lead to prison time of up to three years and a fine of up to 2 crore, or both. A similar jail term but 50 lakh fine would be levied on entities getting subscriber Identity modules through fraud or impersonation.

The bill has replaced licensing with authorization for providing telecommunication services, setting up telecom networks or possessing radio equipment. But this does not mean that the respite in licence fee or spectrum charges would be given; instead, the licence fee will be replaced by an authorization fee, the person cited earlier explained.

Industry players Bharti Airtel and Vodafone Idea have welcomed the new telecom bill, which, they say, will pave the way for reforms in the sector through rationalisation of penalties and right-of-way getting legislative recognition.

“The bill suggests groundbreaking reforms by streamlining India's licensing landscape. It aims to simplify the current convoluted system, which includes various types of licensing (license, registration, permission), into a more cohesive and efficient authorization-based regime,” said Gopal Vittal, managing director of Bharti Airtel, India’s second largest carrier.

A dispute resolution mechanism is also proposed where people can approach an adjudicating authority appointed by the government for dealing with violation of rules. A designated appeal committee will be set up for appealing the decisions. The two-stage mechanism, which will deal with matters before they go to the Telecom Disputes Settlement and Appellate Tribunal, will be online. The bill also makes it mandatory for each service provider has to have a grievance redressal mechanism.

“The introduction of a voluntary undertaking and an appeal process within the government aims to mitigate litigations thereby promoting more efficient resolution of disputes,” Vittal added, noting that the government has rightfully retained oversight of telecom networks from a sovereign security perspective, a requirement integral to India’s telecom licences over the last two decades.

Akshaya Moondra, CEO, Vodafone Idea, said security of telecom networks is paramount, and the Bill recognizes telecom as critical infrastructure and prescribes punitive consequences for those who damage it. By highlighting the duties of users, the Bill puts equal responsibility on consumers to meet the requirements of national security, he added.

The bill also proposes to rename the universal services obligation fund (USOF) as Digital Bharat Nidhi. Telcos give 5% of their annual revenues to the government, which goes to the USOF and is utilized for connecting the unconnected areas of the country.

While the bill was introduced in Parliament, the Bahujan Samaj Party’s Ritesh Pandey opposed it saying it violates the 2017 Supreme Court ruling in the Puttaswamy case that declared privacy a fundamental right. However, the person mentioned earlier said that rules of interception have not been changed and remain as they were in the previous law.

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