Telecom Bill: A New Licence-Permit Raj Online

Why the draft telecom bill falls short of the new law India's dynamic digital economy needs

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Draft Telecom Bill: A New Licence-Permit Raj Online

Telecom laws around the world date back to before the internet's rise, spread and growth to be the ubiquitous substratum of a universe of services that humankind outside jungle communities and books on prehistory count as essential. To eat, mate, and clothe and shelter themselves, people make use of the internet; and then for an entire range of more evolved activities ranging from education to war and entertainment.

The draft telecom Bill seeks to sunnlant the Indian Telesrranh Act 1885. Which defines, as amended, telecom as anything that entails use of the electromagnetic spectrum and so has been good enough to underwrite any online activity. The draft, as it stands, does not offer a compelling reason to replace it.

Unease of Doing Business

This is because the draft has elements of overreach and an approach to technology seemingly rooted in the past. Further, it does not seem to envisage multi-sectoral regulatory cooperation.

There is need for a new law to liberate the online world from the ramshackle structure of accretive, piecemeal regulation resulting from a series of amendments to the law meant for an outdated technological paradigm.

Instead, the proposed law, as it is worded, doubles down on the redundant logic of obsolete technology, and seeks to extend licensing, unless exempted, to every segment of the digital economy. This it does, by defining a telecom service expansively and by reserving to the government the right to provide telecom services, either directly or through a specific licence. Gal could exempt some services from needing a licence, too.

A telecom service, says the draft Bill, 'means service of any description... which is made available to users by telecommunication'. The millions of apps available for use on phones all communicate between the phone and the cloud that hosts their programs, and are all telecom services by this definition and, so, would need either a licence or exemption from a licence.

If Gol's intent is to bring within the ambit of licensing only communication apps such as WhatsApp, the law will need to be worded differently. Judges go by what the law says in unambiguous language, not what might have been intended.

The notion that a service would need to be licensed for it to be regulated is mistaken. Opening a textile processing plant does not need a licence. But its working will have to comply with extant pollution control norms, labour laws and so on. A similar logic should apply to online businesses as well.

Norms to protect investors and consumers should apply to all businesses. Similarly, every business must meet the requirements of national security, whether traceability of messages or decrypting specific messages, in the case of messaging/calling apps.

The point is to put in place safeguards against misuse of national security provisions. For this, the grounds for breaching privacy should be legally certified by a court order and the results of such privacy breach, placed before a committee of the legislature, whose job would be to hold the security forces to account.

Licensing communication apps is a bad idea. You cannot raise capital for a project that might not get a licence on completion. No licence can be issued to an idea, without concrete features. This catch-22 would thwart any Indian challenge to WhatsApp, Signal and Telegram. This is a case for regulation, not licensing.

What is needed is a new-generation law that licenses and regulates the communications infrastructure and leaves people free to build businesses on this network, each subject to the regulation that suits its nature.

Set Spectrum Free

The world will make ever greater use of wireless communications, as more and more businesses and their operations shift to the cloud. To assign spectrum for the assignee's exclusive use is to waste spectrum and deprive others. Ideally, anyone who needs spectrum should be able to dip into one of a few common pools, pay for its use and come back later when it needs more. Today's technology permits equipment to hop across a wide range of spectrum, unlike in the past.

Pay-as-you-go spectrum use would avoid capital being locked up in spectrum acquisition and make all spectrum available for use by anyone. It would also make redundant questions over the spectrum of an operator who gets into a financial mess.

The proposal for the government to take over the spectrum of an insolvent telco undermines telcos' ability to raise credit. It needs financing to acquire spectrum, but the acquired spectrum will not be an asset that can be sold during resolution of insolvency to recover creditor dues. The government should mandate business continuity, that is all. It need not play white knight.

If GoI wants cash upfront from spectrum, it can sell it to large pools of capital such as pension funds and exchange- traded funds that need steady returns, with the permission to sell and lease spectrum use for periods of their choice to operators. This would obviate the need for the state to reassign the 'white space' in the already assigned spectrum.

When telecom is used for applications such as remote surgery, the case arises for regulators of medical practice, insurance and telecom to work together. The draft Bill does not envisage collaborative, multi-sectoral regulation.

In sum, the draft telecom Bill falls short of the new law India's dynamic digital economy needs.