The year 2023 has witnessed several regulatory reforms by the government, many of which were aimed at promoting the ease of doing business. In yet another important step, The Telecommunications Act, 2023 (the 'Act') was enacted by Parliament and received the presidential assent on December 24, 2023. This landmark regulation replaces the archaic Indian Telegraph Act, 1885, Indian Wireless Telegraphy Act, 1933, the Telegraph Wires (Unlawful Possession) Act, 1950 and amends the Telecom Regulatory Authority of India (TRAI) Act, 1997. The Act reforms and simplifies the regulatory and licensing regime for the telecommunications sector.
The Act provides more teeth to the central government and telecom companies now have to seek authorization to establish, operate, maintain, or expand telecommunications networks, provide telecommunications services, or possess radio equipment. The government will come up with rules detailing the requirements of such authorization. The current licenses will remain effective throughout their granted duration, or for a period of five years where the duration is not specified. The government will also have the authority to reallocate unutilized spectrum and provide for sharing, trading, and leasing of spectrum.
Notably, while OTT platforms were part of the draft bill, the final Act does not regulate OTT service providers. However, the definition of "message" has been kept wide under the Act, leading to an ambiguity regarding coverage of messaging platforms like Whatsapp and Telegram.
The government can assign telecommunication spectrum through auction except for services prescribed in the First Schedule of the new law, in which case, the government retains the power to use administrative processes without auction. Some of the new services identified in the First Schedule include in-flight and maritime connectivity, space research and application, launch vehicle operations and ground station for satellite control. Certain satellite-based services such as teleports, TV channels, digital satellite news gathering, satellite based global mobile personal communication, have also been added to the First Schedule. It is expected that with the right regulatory framework for satellite based communication, start-ups may get a boost for innovation and growth.
The Act requires all telecom service providers to employ verifiable biometric based identification mechanisms for identifying users of telecom services. While this has raised privacy concerns, it puts the onus on the service providers to create a mechanism for safe storage of personal data. The new law also mandates prior user consent for receiving promotional messages and allows for users to report malware and cyber fraud. It requires the government to come up with rules consistent with the TRAI regulations to create a more robust framework around user protection. These measures are currently existent and we need to see how the new rules enhance the efficacy of such mechanisms.
The new law gives the government sweeping powers in matters of public emergency or for public safety. The government can allocate, suspend or control telecom services during national disasters. Messages can also be intercepted and disclosed in intelligible format to the authority by the government to maintain public safety. These provisions have raised significant privacy concerns and the government must carefully balance these sweeping powers and privacy safeguards through consultation with the industry.
The Act renames the Universal Services Obligation Fund (USOF) established under the Indian Telegraph Act, 1885 as "Digital Bharat Nidhi". The funds under Digital Bharat Nidhi will be utilised to serve underserved areas, R&D, and will support introduction of new telecommunication services, technologies, and products.
Telecom companies will also have to establish an online mechanism to enable users to register any grievance pertaining to the telecommunication service, and redressal of such grievances. The Act includes stringent penal provisions for non-compliance ranging from imprisonment of three years or fine of Rs 2 cr., or both.
The Telecommunications Act, 2023 is an attempt to streamline the regulatory framework for the telecom sector. While the governing rules are awaited, it is expected that the compliance requirement for telecom service providers will encompass measures for authorization, user identification through biometric means, grievance redressal mechanisms, and spectrum management. Another major compliance focus will be to ensure data privacy, secure storage, and obtaining user consent. Telecom companies face the critical task of balancing innovation and customer demands while navigating complex regulatory landscapes, necessitating proactive adaptation, robust compliance frameworks, and close collaboration with regulatory bodies to prevent penalties in this evolving regulatory environment.
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