Explainer: What does the Draft Telecom Bill 2022 propose?

The Department of Telecommunications under the Ministry of Communications has introduced the Draft Indian Telecommunications Bill, 2022, which seeks to replace the existing legal framework governing the sector in India.

The Bill will consolidate three laws passed by the government and currently governing the telecom industry -- the Indian Telegraph Act, 1885, the Wireless Telegraphy Act, 1933, and the Telegraph Wires (Unlawful Possession) Act, 1950.

With the new Bill, the government hopes to make the legal framework in the telecommunications sector attuned to the realities of the 21st Century, an explanatory note to the Bill said. The laws proposed under the Bill will regulate communication services including voice, video, and data offered by over-the-top platforms such as Whatsapp, making it mandatory for them to obtain a licence from the government to operate like other telecom operators.

The government has sought public comment on the draft Bill by October 20.

With the world stepping into an era of new technologies such as 4G, 5G, and the Internet of Things, telecommunication needs a modern and future-ready legal framework.

India also has the world’s second-largest telecommunication ecosystem with 117 crore subscribers and 4 million employees. The sector contributes about 8 percent of the country’s GDP, ANI reported quoting the note as saying.

To simplify the rules governing the sector, the Ministry of Telecommunications initiated a public consultative process and in July 2022, it published a consultation paper on ‘Need for a new legal framework governing telecommunication in India’.

The government received comments from various stakeholders and industry associations. It examined the comments and has now come up with the draft bill.

The ministry examined the relevant legislations in the UK, US, Australia, Japan, the European Union and Singapore to prepare the draft.

The bill says “spectrum is a scarce natural resource” and provides for its assignment primarily through auction. However, for certain specified functions such as defence, transportation and research, the spectrum can be assigned through the administrative process.

In case a telecom or Internet provider surrenders the licence, the draft bill has a provision to refund the fees. It says, the government can "waive in part or full any fee, including entry fee, licence fee, registrations fee or any other fee or charges, interest, additional charges or penalty" for the licence holder.

The draft bill proposes to bring Internet-based and over-the-top (OTT) communication services such as WhatsApp calls, Facetime, Google Meet, in-flight and maritime connectivity services, machine-to-machine communication services and interpersonal communications services under the laws governing the telecom industry. At present, telecom companies need to have a licence to offer services, while OTT platforms do not. If these services are brought under the ambit of telecom services, they will need a licence to offer services.

The bill proposes to simplify the framework for mergers and acquisitions, demergers and acquisitions, or other forms of restructuring, “by only requiring intimation to the licensing authority," the explanatory note said.

The bill says that the government can defer the payments in case of defaults and in extraordinary circumstances such as financial stress or consumer interest. In such circumstances, the government will be empowered to convert a part or the whole amount payable into shares, write off payable amounts or provide relief from payment.

The draft Bill also proposes to change the name of the Universal Service Obligation Fund (USOF) to the Telecommunication Development Fund (TDF). The amount received under USOF comes from the annual revenue of telecom services providers. The amount received under the TDF will be credited to the Consolidated Fund of India and utilised to boost connectivity services in underserved areas in India.