Syllabus
GS Paper 2 – Government Policies and Interventions for Development in various sectors and Issues arising out of their Design and Implementation.
Context
The Telecommunications Bill, 2023, received the assent of the President and the bill has now been enacted into law.
Telecommunications Reform in India:
- Background:
- The new act aims to replace the Indian Telegraph Act, 1885, and the Indian Wireless Telegraphy Act, 1933, which have governed the telecom sector in India alongside the recently repealed Telegraph Wires (Unlawful Possession) Act, 1950.
- Existing Regulatory Landscape:
- The Telecom Regulatory Authority of India (TRAI) Act, 1997, establishes TRAI as the regulator, overseeing tariff regulations.
- The act also creates the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) for dispute resolution and appeals. Licensing authority remains with the central government.
- Evolution of Communication Technology:
- The 1885 Act, designed for telegraph services, has persisted despite significant advancements in communication technology.
- The sector now encompasses real-time transmission of text, voice, images, and video, offering services like voice calling, SMS, radio broadcasting, television, and internet-based communication.
- Previous Attempts at Reform:
- The Communication Convergence Bill of 2001 sought to replace three telegraph laws, the TRAI Act, and the Cable Television Networks (Regulation) Act, 1995.
- It lapsed with the dissolution of the 13th Lok Sabha. The draft Indian Telecommunications Bill, 2020, was released for public feedback in September 2022.
- Introduction of the Telecommunications Bill, 2023:
- On December 18, 2023, the Telecommunications Bill, 2023, was introduced in Lok Sabha.
- This bill aims to replace the two telegraph laws and establish a comprehensive regulatory framework for the evolving telecom sector.
Telecom Industry in India
- Industry Size and Ranking:
- It is the second-largest telecom industry globally with 1.179 billion subscribers as of August 2023 (wireless + wireline).
- Tele-Density Overview:
- Overall tele-density at 84.69%, with rural tele-density at 57.97% and urban tele-density at 133.55%.
- Internet Subscriber Statistics:
- Total internet subscribers reached 881.25 million by March 2023 (narrowband + broadband), with 40.62% in rural areas.
- Data Consumption Growth:
- Average monthly data consumption per wireless data subscriber increased to 17.36 GB in March 2023 from 61.66 MB in March 2014.
- Growth Drivers:
- Exponential industry growth attributed to:
- Affordable tariffs.
- Widespread availability.
- Mobile Number Portability (MNP).
- Expanding 3G and 4G coverage.
- Changing subscriber consumption patterns.
- Government initiatives in telecom manufacturing.
- Favorable regulatory environment.
- Exponential industry growth attributed to:
- 5G Spectrum Auction:
- Government approval for IMT/5G spectrum auction to accelerate digital connectivity.
- Successful auction held by end of July 2022, generating $18.77 billion.
- FDI Inflows and Employment Contribution:
- The telecom sector ranks as the 4th largest sector for Foreign Direct Investment (FDI), contributing 6% of total FDI inflow.
- Direct employment impact of 2.2 million jobs, with an additional 1.8 million jobs indirectly supported.
- FDI Growth Trend:
- FDI inflows in the Telecom sector increased by 150% between 2014 and 2021, rising from $8.32 billion (2002-2014) to $20.72 billion.
- FDI Policy Change:
- 100% Foreign Direct Investment (FDI) is now permitted in the Telecom sector.
Major Provisions of the Act
- Authorization for Telecom Activities:
- Prior central government authorization required for:
- Providing telecommunication services.
- Establishing, operating, maintaining, or expanding telecommunications networks.
- Possessing radio equipment.
- Existing licenses remain valid for their grant period or five years if unspecified.
- Prior central government authorization required for:
- Spectrum Assignment:
- Spectrum assigned through auction, with exceptions for specified uses.
- Specified purposes include national security, disaster management, weather forecasting, transport, satellite services, and public broadcasting.
- Central government empowered to re-purpose or re-assign any frequency range.
- Provision for sharing, trading, leasing, and surrender of spectrum.
- Interception and Search Powers:
- Messages may be intercepted, monitored, or blocked on specified grounds, subject to prescribed procedures and safeguards.
- Grounds include security of the state, prevention of incitement of offenses, or public order.
- Telecom services may be suspended for similar grounds.
- Temporary possession of telecom infrastructure allowed during public emergencies.
- Authorized officers may search premises or vehicles for unauthorized telecom networks or equipment.
- User Protection Measures:
- Central government empowered to:
- Require prior consent for specified messages.
- Establish Do Not Disturb registers.
- Create a mechanism for users to report malware or specified messages.
- Telecom service providers must establish an online grievance redressal mechanism.
- Central government empowered to:
- Right of Way:
- Entities laying telecommunication infrastructure may seek right of way over public or private property.
- Right of way provided on a non-discriminatory and non-exclusive basis to the extent possible.
- TRAI Appointments:
- Amendment to TRAI Act allows individuals with professional experience to serve as Chairperson (30 years) and members (25 years).
- Digital Bharat Nidhi:
- Universal Service Obligation Fund renamed Digital Bharat Nidhi.
- Fund use extended to research and development in telecom.
- Offences and Penalties:
- Various criminal and civil offences specified, including unauthorized provision of telecom services and unauthorized access to networks or data.
- Penalties include imprisonment, fines, or both.
- Adjudication Process:
- Central government appoints adjudicating officer for civil offences.
- The officer must be of the rank of joint secretary or above.
- Appeals to Designated Appeals Committee and further to TDSAT for breach of terms and conditions.
Major Concerns with the Act
- Interception of Communication:
- Any message may be intercepted on specified grounds, including the security of the state and public order.
- Telecom services, including internet shutdowns, may be suspended on similar grounds.
- Procedure and safeguards are delegated to government-prescribed rules.
- Need for Explicit Safeguards:
- Questions arise on whether procedural safeguards should be explicitly mentioned in the Act, similar to Aadhaar Act’s provisions.
- Consideration of an independent oversight mechanism for interception.
- Potential for Mass Surveillance:
- Concerns about the Act enabling mass surveillance, potentially violating the right to privacy.
- The proportionality of such actions to their objective needs scrutiny.
- Lack of Safeguards for Search and Seizure:
- The Act allows search and seizure without specifying safeguards.
- Contrasts with existing laws like the Code of Criminal Procedure that provide stringent conditions.
- Biometric Verification Concerns:
- Requirement for biometric verification raises questions about proportionality and privacy infringement.
- Comparison with the Aadhaar linking case where the Supreme Court deemed it disproportionate.
- Inclusion of Internet-Based Services:
- The Act’s broad definition of telecommunication services includes internet-based services.
- Contrasts with the Indian Telegraph Act, which focuses on the carriage of communication.
- Delegation of Regulatory Functions:
- Regulatory functions concentrated in the central government, diverging from sectors like power and finance.
- Contrast with TRAI’s current role as the primary regulatory body.
- Offences and Penalties Modification:
- Empowering the government to modify offences through notification raises concerns.
- The appropriateness of allowing changes through notifications versus parliamentary acts.
- Limit on SIM Card Usage:
- The Act includes an offence for exceeding the notified number of SIM cards.
- Raises questions about the need for a legal limit on the number of SIM cards and associated penalties.
Significance of the New Legislation
- The Telecommunications Act of 2023 aims to overhaul antiquated laws like the Indian Telegraph Act (1885), the Wireless Telegraphy Act (1933), and the Telegraph Wires (Unlawful Possession) Act (1950), recognizing the necessity for reform in the face of significant changes in the telecom sector.
- The bill brings clarity to the burgeoning field of satellite broadband services, aligning India with international standards. This not only facilitates connectivity expansion in remote areas but also opens doors for global players, fostering innovation, startup opportunities, and bolstering India’s standing in the global satellite market.
- Unlike a previous draft that allowed various means for spectrum assignment, the 2023 bill narrows it down to auction or administrative processes, curbing executive discretion and promoting transparency in the allocation process.
- The bill incorporates provisions for government intervention during emergencies, emphasizing a focus on national security and public safety. This balanced approach considers the need for security without compromising individual freedoms.
- Introducing online dispute resolution mechanisms for grievance redressal reflects a commitment to modernize governance. This move is anticipated to streamline business processes and enhance the overall ease of conducting business in the telecom sector.
- The bill simplifies bureaucratic procedures, particularly in the authorization process for telecom operators. By consolidating various licenses, registrations, and permissions into a unified process, the legislation aims to provide regulatory stability and a conducive environment for the forthcoming phase of telecom expansion.
- Not extending its scope to telecom-adjacent services, such as OTT, prevents excessive regulation, allowing the sector to evolve organically without unnecessary interference.
- Recognizing the importance of press freedom, the bill includes specific rules for accredited correspondents, demonstrating a commitment to maintaining a delicate balance between security measures and the preservation of individual liberties.
- By replacing outdated laws, the Telecommunications Bill aspires to establish a regulatory framework that aligns with contemporary technological advancements and societal needs, ensuring relevance and adaptability in the ever-evolving telecom landscape.
The way Forward
- Ensuring Checks and Balances:
- Introduce safeguards to prevent misuse, limiting executive action to declared national emergencies under Article 352 and requiring Parliamentary approval.
- Safeguarding the Right to Privacy:
- Align provisions related to message interception and service suspension with fundamental rights, particularly the right to privacy.
- Enhancing Transparency Measures:
- Address privacy concerns with an open-minded approach, recognizing the extensive powers granted by the Act.
- Conduct rule-making processes transparently and engage in consultations for inclusive decision-making.
- Promoting Technological Adaptability:
- Acknowledge the importance of adapting legal frameworks to global technological trends.
- Encourage provisions for innovation and flexibility within the telecommunications sector to address emerging challenges.
- Revitalizing the Telecom Industry:
- Position the Act as a significant effort to rejuvenate the telecom industry and harness its potential for India’s economic growth.
- Emphasize the need for regulatory measures that create a conducive environment for industry development.
References:
Invest India
Business Standard
Practice Question
Discuss the key objectives and significance of the Telecommunications Act 2023 in replacing colonial-era laws. How does it aim to create a regulatory environment aligned with contemporary technological advancements?