Introduction:
The Ministry of Communications ("Ministry") has recently released a proposed draft Indian Telecommunications Bill, 2022 ("Draft Bill, 2022") to govern the telecommunication sector in India. The Draft Bill, 2022 was prepared, based on the feedback received from industry stakeholders on the consultation paper released by Department of Telecommunication's ("DoT") in July 2022 and proposes to repeal the Indian Telegraph Act, 1885, the Indian Wireless Telegraphy Act, 1933 and the Telegraph Wires (Unlawful Possession) Act, 1950.
The Draft Bill, 2022 includes framework relating to licensing, spectrum, infrastructure, right of way, mergers, security standards, penalties, user protection and duties and proposes a Telecommunication Development Fund and Regulatory Sandbox to encourage technological innovation. In establishing the guidelines on the aforementioned aspects of the telecom sector, the Draft Bill, 2022 has introduced the concept of 'telecommunication service'. As the concept and scope of this term directly impacts the licensing regime as contemplated under the provisions of the Draft Bill, 2022, it becomes imperative to analyze such scope and applicability of this definition. At the moment, we believe that the definition of the telecommunication services is broadly worded, and rather ambiguous, which could make the implementation of any licensing regime brought under it, quite complicated.
Definition of Telecommunication Services
The phrase 'Telecommunication Services' is not defined in The Telegraph Act, 1885 ("Telegraph Act") but rather is defined in the Telecom Regulatory Authority of India Act, 1997 ("TRAI Act"), However, the definition provided in the TRAI Act, 1997 is not relevant for the purpose of issuance of telecom licenses and so, we will have to ascertain its meaning through other sources. In the current regime, Telecommunication Services that require one to obtain a license under the Telegraph Act, are specified in the National Digital Communication Policy 2018. In other words, telecommunication services specified in the National Digital Communication Policy 2018 require license under Section 4 of the Telegraph Act.
The Draft Bill, 2022 defines 'Telecommunication Services' as "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"
Further, the Draft Bill, 2022 defines 'license" as a license, approval, authorization, permission by whatever name called, granted under the provisions of the Draft Bill, 2022, for providing telecommunication services. Thus, as per the licensing regime as envisaged in the Draft Bill, 2022, a telecom license will be provided for all those services included within the scope of telecommunication service. As such, these are the services which we shall analyse.
Issues with the definition of telecommunication services:
From the above definition, many varied services are sought to be brought within the purview of a license. The definition of Telecommunication Services is not exhaustive in nature and the use of the phrase "service of any description" creates a wide ambit that would include many services within its scope. Further, such phrasing will create a potential dispute regarding the inclusion or exclusion of services in the definition.
Most of the services specified herein are difficult to define and it is challenging to understand and pin down the exact nature of services like electronic mail, voice mail, voice, video and data communication services, internet-based communication services interpersonal communications services, machine to machine communication services, and over-the-top (OTT) communication services. The inclusion of these services is a novel introduction to the licensing framework under the Draft Bill, 2022. These services encompass a broad range of non-telecommunication services such as e-mail services, internet-based text messaging etc. and bringing all these services under the ambit of a licensing regime will result in over-regulation and will bring with it further challenges with regards to implementation and enforcement. Other services such as voice, video and data communication services, internet-based communication services and over-the-top (OTT) communication services also find themselves included in the definition of telecommunication service, while being only tangentially related in their scope. In order to observe the absurdity that may arise by the inclusion of OTT services within this definition, it is beneficial to examine the definition of OTT services.
The Draft Bill, 2022 does not define OTT services, however, TRAI in its consultation paper on Regulatory Framework for Over-The-Top (OTT) communication Services, 2018, defines OTT "as a service provider which offers Information and Communication Technology (ICT) services, but neither operates a network nor leases network capacity from a network operator. Instead, OTT providers rely on the global internet...". From the abovementioned definition, it is clear that, OTT communication services could include internet-based voice, video or data services thereby bringing within its ambit large number of providers who are offering such services.
Furthermore, TRAI in its recommendations to the DoT on "Regulatory Framework for Over-The-Top (OTT) Communication Services" dated 14th September 2020 stated that "the Authority recommends that it is not an opportune moment to recommend a comprehensive regulatory framework for various aspects of services referred to as OTT services, beyond the extant laws and regulations prescribed presently. The matter may be looked into afresh when more clarity emerges in international jurisdictions particularly the study undertaken by ITU". The proposed inclusion of OTT communication services is contrary to the recommendations given by TRAI to the DoT.
In this context, it is important to be mention that National Digital Communication Policy 2018 with respect to OTT states that "promoting innovation in the creation of Communication services and network infrastructure by Developing a policy framework for 'Over the Top' services". The legislative focus has been on policy framework to promote innovation rather than bring it in the licensing regime.
Further, the 'machine-to-machine communication services' in view of 'Internet of Things' need to be defined clearly. Any companies offering services such as smart integration of devices (Ex: Smart homes, smart cars, smart assistants) would potentially require a license. Due to this ambiguous and expansive scope, it can lead to absurd interpretations, thus covering technologies like Bluetooth and air-drop as well.
Analysis & Conclusion:
In light of the abovementioned concerns, it is strongly recommended that the definition of 'Telecommunication Services' solely include those services that fall within the ambit of telecommunication and not generally include various internet-based services. Merely because communication is occurring between two entities, it does not mean that the communication is of a telecommunication nature. The essence of these two services, the technologies involved, and their functionalities are very different from one another and thus, they should be regulated separately. It is essential that strict guidelines be identified for what qualifies a service as a telecommunications service and what does not. As telecom licensing is based on this definition, we must ensure that, for smoother implementation of the Draft Bill, 2022, the intent, spirit and essence of the licensing regime, as envisioned under Section 4 of Telegraph Act, is kept alive. The transition of telecom licenses and other industry players, from the current licensing regime to the new one, must be made as seamless as possible and the present definition of telecommunication services, in the Draft Bill, 2022, makes this transition needlessly complicated, and burdensome. This definition, if not crafted with care, has the potential to lead to absurd results, and hence must be amended accordingly.
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