Draft Telecom Bill enhances unease of doing biz amid regulatory overlaps

Regulatory overlaps between multiple ministries and overreach by DoT worry stakeholders

The draft telecommunication Bill that was put up for comment last month has stakeholders worried about regulatory overlaps between multiple ministries and overreach by the department of telecommunications (DoT).
 

Whatever the description, stakeholders are deeply concerned that the draft law forces digital companies to re­­port to two ministries — DoT under the telecom min­istry, and Ministry of Electronics and Information Technology (MeitY) and, in some cases, the Ministry of Information and Broadcasting (I&B). This state of affairs hardly enhances the government’s stated res­o­lve to improve the “ease of doing business” environ­ment. The fact that DoT and MeitY come under the purview of one minister — Ashwini Vaishnaw, chief architect of the Bill, in fact — does not help matters.
 

A good example of overreach and overlap lies in the powers the government has assumed under the Bill to intercept any “message” in the interest of the “sovereignty, security, integrity of the country”. Apart from the fact that this broad-brush provision allows for a wide interpretation of sovereignty, security and integrity, it also vests DoT with the same powers as MeitY, that too without filters. Plus, the safeguards implicit in the IT Act are absent in the Bill.
 

The areas of overlapping jurisdictions are large, too. Over-the-top (OTT) services, video and audio services under Section 2 of the draft Bill, are also covered under the IT Act as curated content. Plus, OTT communication services are already regulated as intermediaries under the IT Act.
 

“Misinformation has been spread that we are not regulated. Under the IT Act, we are defined as intermediaries. Now under the draft Bill we have been incorporated also as ‘telecommunications services.’” So, we now have to report to both ministries — apart from following the instructions of the Ministry of Home Affairs. There goes the ease of doing business,” said a senior executive of an OTT platform.
 

Then, IT, applications and software-related services have, so far, been under MeitY and its specialised bodies such as the Indian Computer Emergency Response Team. The Bill includes aspects of software under the definition of “telecommunications equipment”, which many say undermines the position of MeitY’s specialised agencies.
 

There are definitional overlaps, too. The definitions of telecommunication services, wireless equipment and wireless communication in the Bill overlaps with those of communication devices, computer and computer network in the IT Act, and the definition of communication link and digital media under the IT Rules. There are also a duplication of penalties and powers to set standards between the two Acts.
 

Direct-to-home services (such as cable operators) have been defined as broadcasting services under tele­com services in the Bill. Yet the Cable Act of 1995, which falls under the I&B ministry, was formulated to govern the registration and operation of cable networks. What will happen now is a duplication of regulation between the proposed telecom Bill and the Cable Act. Both laws have identical provisions for revoking the registration and issuing directions.
 

Also, the provisions for “right of way” for cable operators and for telecom infrastructure under the Bill have substantially similar provisions for regula­ting the same matter. DoT officials said many of these overlapping issues will be resolved once the new Digital Bill to replace the IT Act is also put out in the public domain for discussion. All the same, broadcasters are worried about the opaqueness and potential for regulatory overreach by DoT.
 

Another key grouse is that the Bill has not clearly defined what constitutes “broadcasting services”, also within the ambit of communication services.
 

“The definition does not distinguish between carriage and content. Broadcasting organisers are content providers, which comes under the I&B ministry. By not defining the terms, it is left to the discretion of officers who might want to also control cont­ent,” said a senior executive of a global broadcasting firm.
 

A broadcasting company executive highlighted the financial impact of regulations through various ministries: “Regulatory uncertainty impacts investment. It also increases the cost of compliance, which forces us to increase prices. It also gives bad actors an opportunity to approach different ministries with the same task. It’s not good for the industry.”
 

Many stakeholders are also surprised by the fact that well-considered decisions by DoT just a few months ago are now being reversed through the Bill.
 

For instance, machine-to-machine (M2M) communications is now being treated as “communication services” requiring a licence. But that’s a reversal of DoT’s decision prescribing a registration framework issued through guidelines in February 2022.
 

Stakeholders are concerned that if (M2M) services are licensed, non-cellular technologies such as radio-frequency identification, Bluetooth and near-field communication will also come under the purview of licensing. Industry estimates there will be at least 50 million M2M devices in the next five years, 95 per cent will operate on non-cellular technologies — all of which will be licensed.
 

This apart, DoT had through a notification and consultation with MeitY exempted various products like mobile devices, smartwatch, smart cameras and PoS machines from the mandatory testing and certi­fication of telecom equipment under the Indian Tele­graph Act in April. By including such devices under the definition of telecom equipment again, the Bill gives DoT powers to test them again. Meanwhile, telcos and broadcasters are concerned that the draft Bill will clip the powers of independent regulators and quasi-judicial institutions like the Telecom Dis­putes Settlement and Appellate Tribunal (TDSAT).
 

The Bill adds uncertainty to TDSAT’s role by intro­d­u­cing an alternative redressal system. The draft em­powers the government to refer any disputes to arbitration, mediation or other processes. “The alternatives of going for mediation and arbitration are available to you. So why incorporate it in a Bill?” said the official of a body that has dealt with TDSAT.
 

DoT counters that small cases can easily be re­so­l­ved through mediation rather than having to burden TDSAT where bigger, more contentious cases should be heard. Despite DoT’s “maximalist” position, it appears to be ready to negotiate on key issues with stakeholders rather than push through the Bill as it is. All the players in the game fervently hope so too.

Crossed connections

• Substantial overlap between draft Bill and IT Act on interception of messaging, penalties, formulating standards and various definitions
• OTT communication services will be forced to report to two ministries as a result of the Bill Cable Act, which through I&B ministry controls cable operators, will clash with the Bill that includes direct-to-home broadcasting 
• Broadcasters fear opaqueness in definition may encourage DoT to regulate content also