Post: Release Date – 12:16 AM, Friday – November 4th
India has come a long way from the “license-permission” era that notoriously stifled entrepreneurship, innovation and growth. However, if the terms of the draft telecommunications bill are approved, the much-maligned system could make a comeback. While there are several aspects of the draft legislation that will help boost the industry’s growth, a worrying one is the proposed extension of the license to OTT communication platforms such as WhatsApp and Telegram. The draft bill seeks to consolidate three separate acts governing the telecommunications sector – the Indian Telegraph Act 1885, the Indian Wireless Telegraphy Act 1933 and the Telegraph Lines (Illegal Protection) Act 1950. OTT players use telecommunications networks to provide value – based on customers’ data usage, telcos get additional services that customers pay for. Additionally, OTT players as intermediaries are already regulated under the Information Technology Act, while telecommunication service providers are regulated under a separate telecommunication regulation, which is now being replaced by the proposed Telecommunication Act 2022. The draft bill seeks to widen the boundaries with a comprehensive definition of telecommunications services, bringing OTT or Internet-based communication systems into the regulatory regime. This one-size-fits-all approach can harm OTT and telecom services. Including OTT players in the Telecom Act would increase regulatory overlap and create a licensing regime for them. Since the bill is looking at transport-based telecommunications services and content-based OTT communication services that fall within the Internet domain, it is important to regulate these two services separately.
The licensing regime proposed in the draft legislation could increase barriers to entry and affect the development of the innovation and entrepreneurial ecosystem as compliance costs increase. Merging two different service providers under one regulatory regime may violate the principle of equality as there is no reasonable basis for extending it into the Internet-based communication services/OTT realm. The Act empowers the government to direct service providers to intercept messages on end-to-end OTT platforms and disclose messages sent through these channels in order to maintain public safety and national security. This amounts to compromising user privacy. The Telecom Regulatory Authority of India is also warning against patching encryption in a recommendation to the Ministry of Telecommunications as it affects the privacy and security of citizens. What the country needs is a regulatory framework that provides stability, predictability and legal certainty. A legal framework based on the “one sector, one regulator” concept helps to provide stakeholders with clear information. For a country looking to create a vibrant digital economy, enacting a law that requires every app developer on the internet to obtain a government license would be tantamount to limiting innovation.
