The Parliament of India has passed the Telecommunications Bill, 2023 (“Bill”) on December 21, 2023. The Bill seeks to regulate telecommunication services in India. It repeals the Indian Telegraph Act, 1885, the Indian Wireless Telegraphy Act, 1933, and the Telegraph Wires (Unlawful Possession) Act, 1950. It also amends the Telecom Regulatory Authority of India (TRAI) Act, 1997.

A BRIEF ANALYSIS OF SOME KEY PROVISIONS UNDER THE BILL 

Auction of spectrum and exceptions to the auction process

The Bill empowers the central government to authorise and assign spectrum through auctions, except for specific cases as specified in the first schedule of the Bill.

Importantly, the Bill empowers the central government to allocate, inter alia, satellite broadband spectrum instead of auctioning it. The Bill outlines 19 specific cases for which the assignment of spectrum will be conducted through an administrative process rather than an auction. These cases encompass a range of services and purposes, including global mobile personal communication by satellites, national long-distance and international long-distance services, direct-to-home services, and telecom services provided by state-run entities such as Bharat Sanchar Nigam Limited (BSNL), and Mahanagar Telephone Nigam Limited (MTNL).

In this context, it is important to highlight that the Supreme Court in Centre for Public Interest Litigation v. Union of India,^[1] emphasised on wider participation in allocation of natural resources in the following terms “While transferring or alienating the natural resources, the State is duty-bound to adopt the method of auction by giving wide publicity so that all eligible persons can participate in the process.” In Natural Resources Allocation, In re, Special Reference No. 1 of 2012,^[2] the Supreme Court clarified that although auction is not a constitutional mandate, it can surely be applied in some situations to maximise revenue returns, to satisfy legal and constitutional requirements.

Retaining the auction process for allocation of various telecommunication services reflects a proactive approach in line with judicial recommendations, ensuring transparency and fairness in the allocation. However, at the same time, doing away with the auction process for a large number of services raises serious apprehensions.

Right to intercept by the government

Telecommunication is defined in a wide manner, which includes messages, whether rearranged, computed, or subjected to other processes, during the course of their transmission, emission, or reception. The Bill expressly removes broadcasting services from the ambit of telecommunication services. Interestingly, the definition of telecommunication does not cover under its ambit the Over-The-Top (OTT) media services.

The Bill mandates authorisation from the central government for anyone intending to provide telecommunication services, establish or expand a telecommunication network, or possess radio equipment.

The Bill, inter alia, under Section 20 provides that a message or a class of messages exchanged between two or more persons could be directed by the central government and state government to be intercepted in intelligible format, monitored, and prevented from being transmitted, in the interest of public emergency and public safety. The provision is couched in wide terms and, gives a broad discretion to the government to intercept and monitor any message or class of messages, to or from any person.

Moreover, enabling identification of the first originator of information on its platform may negatively impact the end-to-end encryption which is the supreme privacy guaranteeing feature of popular messaging platforms. This may also put its advantages at risk and in turn, infringe the fundamental right of privacy. This is borne out from several provisions under the Bill. The first provision which may trigger the above issue is the definition of telecommunication which includes the transmission, emission, or reception of any messages through wire, radio, optical, or other electromagnetic systems. Arguably, messaging platforms will fall within the scope of the Bill. The second provision is Section 19 of the Bill which empowers the central government to notify standards and conformity assessment measures in respect of encryption and data processing in telecommunication. It will be important to review such standards and measures to be implemented by the government to assess the scope of traceability and interception of data.  Notably, enabling identification of the first originator of the information on a computer source is already provided under the Intermediary Guidelines, 2021 under the Information Technology Act, 2000.

In K.S. Puttaswamy (Privacy-9J.) v. Union of India^[3], the Supreme Court affirmed that the right to privacy is an inherent part of the right to life and personal liberty under Article 21 of the Constitution of India. In this case, the Supreme Court emphasised, inter alia, the principle of proportionality and legitimacy and held that the possibility of the State infringing the right to privacy can be met by the following test:

1. The action must be sanctioned by law;
2. The proposed action must be necessary in a democratic society for a legitimate aim;
3. The extent of such interference must be proportionate to the need for such interference;
4. There must be procedural guarantees against abuse of such interference.

In view of the above, the implementation of Section 20 of the Bill, if not done proportionately, will amount to infringement of the ‘right to privacy’ of the individuals as guaranteed under the Constitution of India.

In People’s Union for Civil Liberties (PUCL) v. Union of India^[4], the Supreme Court emphasised that in the absence of just and fair procedure for regulating the exercise of power under an Act, it is not possible to safeguard the rights of the citizens guaranteed under Articles 19(1)(a) and 21 of the Constitution of India. Therefore, unless and until, the legislature lays out detailed procedure to regulate/ monitor the interception of private information and data exchanged between two or more persons, the provision as it exists, is insufficient to take care of the fundamental rights. It is worth mentioning that the Supreme Court in Chief Inspector of Mines v. Lala Karam Chand Thapar^[5]took the position that without proper regulations, a statute will often be worse than useless.

Technologically neutral utilisation of spectrum

The Bill under Section 6 allows the central government to facilitate the utilisation of spectrum in a flexible, liberalised, and technologically neutral manner. This is a crucial aspect that fosters a level playing field for different technological solutions by ensuring that the government does not impose restrictions based on specific technologies.

Digital Bharat Nidhi

The Universal Service Obligation Fund under the Telegraph Act, 1885 is a pool of funds generated by collection of 5% of the universal service levy that is imposed on telecom service providers. This Universal Service Obligation Fund has been rebranded as Digital Bharat Nidhi, i.e., a fund for providing telecom services in underserved areas.

Enforcement mechanism under the Bill – Makes it a complete code

In terms of enforcement, the Bill introduces provisions for adjudication of contraventions under the Bill. It provides for voluntary undertakings by the facility providers as a mitigating measure of contraventions. This undertaking discloses the contraventions and outlines measures taken or to be taken to mitigate them. The Bill provides for appeals through a Designated Appeals Committee, and an appeal process to the Telecom Disputes Settlement and Appellate Tribunal. The chapter on offences and penalties under the Bill lays out the consequences for violation of the provisions of the Bill.

Online Dispute Resolution (“ODR”) – Shows the government’s alignment with efficient use of technology for dispute resolution

The Bill addresses the lacunae under the erstwhile telecom regulatory regime as the erstwhile regime did not have an effective dispute resolution mechanism between the users and telecom service providers. Under the Bill, the central government is empowered to establish or approve ODR mechanisms for resolving disputes between users and authorised entities offering telecommunication services. Authorised entities are obligated to participate in these mechanisms, adhering to prescribed terms and conditions. Importantly, the Bill does not affect the rights of the users under the Consumer Protection Act, 2019.

Extraterritorial application of the Bill

The provisions of this Bill are applicable to offences committed or contraventions made outside India if the contravention involves a telecommunication service provided in India or telecommunication equipment or network located in India.

KEY PROVISIONS UNDER THE BILL:

• Definition of Telecommunication

Telecommunication is defined as the transmission, emission, or reception of any messages through wire, radio, optical, or other electromagnetic systems. This includes messages, whether rearranged, computed, or subjected to other processes, during the course of their transmission, emission, or reception.^[6]

• Power of authorisation

Individuals intending to provide telecommunication services, establish or expand a telecommunication network, or possess radio equipment must obtain authorisation from the central government. Existing licences will continue to be valid for the period of their grant or for five years, where the period is not specified.^[7]

Authorised entities offering specified telecommunication services, as notified by the central government, must employ verifiable biometric-based identification to identify individuals availing the telecommunication services.^[8]

• Assignment of spectrum

The central government, as the spectrum owner, assigns spectrum and may notify a National Frequency Allocation Plan from time to time.^[9]

Anyone intending to use spectrum requires an assignment from the central government. The central government may prescribe applicable terms and conditions for spectrum assignment, covering frequency range, pricing methodology, price, fees, charges, payment mechanism, duration, and procedure.^[10]

Spectrum for telecommunication is assigned through auction, except for entries in the first schedule, which are assigned administratively.^[11]

The first schedule includes – National security and defence, law enforcement, public broadcasting, disaster management, scientific research, satellite communication, and transportation safety. It extends to areas such as conservation, meteorology, amateur stations, and international communication. Additionally, spectrum is designated for the operation of telecommunications services by governmental entities, safety support in industries like mining and oil exploration, public services by BSNL and MTNL, and testing for emerging technologies through regulatory sandboxes.

• Re-farming and harmonisation

The central government may re-farm or harmonise any assigned frequency range under Section 4 to enhance spectrum efficiency. “Harmonisation” means rearranging a frequency range, and “re-farming” means repurposing it for a different use than that for which it is used by an existing assignee.^[12]

• Technologically neutral use of spectrum

The central government may facilitate the utilisation of spectrum in a flexible, liberalised, and technologically neutral manner, subject to prescribed terms and conditions, including applicable fees and charges.^[13]

• Optimal utilisation of spectrum

To promote optimal use of available spectrum, the central government may assign a specific part of the spectrum, assigned to a primary assignee, to one or more additional entities (secondary assignees). The central government may also terminate the assignment or a part thereof if the assigned spectrum remains unutilised for insufficient reasons for the prescribed period. Further terms and conditions regarding spectrum utilisation may also be prescribed.^[14]

• Establishment of monitoring and enforcement mechanism

The central government has the authority to establish a monitoring and enforcement mechanism to ensure compliance with the terms and conditions of spectrum utilisation, facilitating interference-free use of the assigned spectrum. The central government may authorise the sharing, trading, leasing, and surrender of assigned spectrum, subject to prescribed terms and conditions, including applicable fees or charges.^[15] 

• Right of way for telecommunication network in public property

Any facility provider may apply to a public entity, owning, controlling, or managing public property, for permissions related to the right of way for a telecommunication network on such public property.^[16]

[“facility provider” means the Central Government or any authorised entity, including any contractor or sub-contractor or agent working for the Central Government or authorised entity, and shall include their successor or assignee; “public entity” means (i) the Central Government (ii) the State Government; (iii) local authority;]

The public entity shall grant permission expeditiously within prescribed timelines subject to administrative expenses and compensation for the right of way. Rejection of an application requires reasonable grounds recorded in writing.^[17]

Facility providers (telecommunication companies or entities) can submit applications to the person who owns, controls, or manages property not covered under Section 11 to seek the right of way for a telecommunication network. Section 13 mandates that any individual granting the right of way under Section 11 or Section 12 must ensure that such granting is done in a non-discriminatory manner.^[18]

The telecommunication network, once installed on a property, is separate from and does not grant the facility provider any right, title, or interest in the property.^[19]

• Removal, relocation, or alteration of telecommunication network

If necessary, the person entitled to property under Section 11 or Section 12 can request the facility provider to remove, relocate, or alter a telecommunication network on the property.^[20]

The District Magistrate, or another authority to be notified by the central government, has exclusive powers to resolve disputes regarding removal, relocation, and alteration of the telecommunication network.^[21]

• Standards, public safety, national security, and protection of telecommunication networks

The central government can notify standards for telecommunication equipment, services, security, cyber security, encryption, and data processing.^[22]

The central government can take temporary possession, and control of telecommunication equipment, services, and networks, in case of any public emergency, including disaster management, or in the interest of public safety. Further, in the interest of national security, friendly relations with foreign states, or in the event of war, the central government is empowered to issue directions in respect of, inter alia, standards for manufacturing, importing, and distributing telecommunication equipment.^[23]

The central government can establish rules to ensure cybersecurity, including the declaration of Critical Telecommunication Infrastructure. Such a declaration means that the disruption of this infrastructure would have severe consequences on national security, the economy, public health, or safety.^[24]

• Digital Bharat Nidhi

The Universal Service Obligation Fund, which was earlier established to provide telecom services in underserved areas and for research and development has been rebranded and renamed as Digital Bharat Nidhi. Any money paid pursuant to an authorisation shall be credited to the Digital Bharat Nidhi.^[25]

• Innovation and Technology

 The central government is empowered to create regulatory sandboxes to encourage innovation and technological development.^[26] A regulatory sandbox allows testing new concepts in controlled environments, granting exemptions, allowances, or time-bound exceptions.

The central government can establish rules for protecting users, including obtaining consent for specified messages and maintaining a “Do Not Disturb” register.^[27] The term “specified message” is defined as any message that offers, advertises, or promotes goods, services, interest in property, business opportunities, employment opportunities, or investment opportunities.

The central government may establish ODR mechanisms, and authorised entities must participate and comply with prescribed terms and conditions. Notably, consumer rights under the Consumer Protection Act, 2019, will not be affected by this provision.^[28]

• Adjudication of certain contraventions

The central government will appoint one or more adjudicating officers. These officers, not below the rank of joint secretary in the central government, will conduct inquiries in the manner prescribed for the contraventions under Sections 32 and 33.^[29] Any order issued by the adjudicating officer or the Designated Appeals Committee has the enforceability equivalent to that of a civil court decree.^[30]

 In the event of a breach of any terms and conditions of authorisation or assignment granted under this Act, the adjudicating officer, following an inquiry, may: (i) direct the authorised entity or assignee to perform or refrain from doing any act or thing to prevent the breach or ensure compliance, (ii) impose civil penalties as specified in the second schedule, (iii) make recommendations to the central government for consideration regarding the suspension, revocation, or curtailment of the duration of the authorisation or assignment.^[31] When imposing penalties specified in the second schedule, the adjudicating officer shall take into account the following factors:^[32]

• Nature, gravity, and duration of the contravention.
• Number of persons affected by the contravention and the level of harm caused.
• Intentional or negligent character of the contravention.
• Repetitive nature of the contravention.
• Mitigating action, if any, including providing a voluntary undertaking.
• Revenue loss caused to the central government.
• Any aggravating factors relevant to the circumstances of the case, such as the amount of disproportionate gain or unfair advantage, wherever quantifiable.

• Voluntary undertaking for contraventions

An authorised entity or assignee, in violation of Section 32 or serial no. 4 of the third schedule, may, before any notice or initiation of the determination process, submit a voluntary undertaking to the adjudicating officer. This undertaking discloses the contraventions and outlines measures taken or to be taken to mitigate them. Such undertaking will be accounted for determining civil penalties, subject to modification by the adjudicating officer with the consent of the authorised entity.^[33]

• Designated Appeals Committee

The Designated Appeals Committee is designated to hear appeals from individuals aggrieved by orders issued by the adjudicating officer under sub-section (1) of Section 32 or under Section 33.^[34]

• Appeals to Telecom Disputes Settlement and Appellate Tribunal

Any individual dissatisfied with an order of the Designated Appeals Committee under Section 36, particularly concerning matters specified in sub-section (1) of Section 32, or an order of the central government under sub-section (2) of Section 32, has the right to file an appeal. This appeal should be made to the Telecom Disputes Settlement and Appellate Tribunal within thirty days from the date of receipt of the order by the authorised entity.^[35]

• Offences and Penalties

The Bill outlines several criminal and civil offences. Offering telecom services without authorization or unauthorised access to a telecom network is subject to imprisonment for up to three years, a fine of up to two crore rupees, or both. Violating the terms and conditions of authorization incurs a civil penalty of up to five crore rupees. Possession of unauthorised equipment or the use of an unauthorised network or service is punishable by a penalty of up to ten lakh rupees.^[36]

Under Section 43 of the Bill, an authorised officer can conduct searches in buildings, vehicles, vessels, aircraft, or places where there is reason to believe that unauthorised telecommunication networks, equipment, or radio equipment related to an offence under Section 42 are kept. Notably, the authorised officer has the power to seize such items.

• Other key miscellaneous provisions

Certification of person for operation of radio equipment on a vessel or aircraft^[37]

The central government is empowered to issue certification to individuals for the operation of radio equipment on specified vessels, including those registered under the Merchant Shipping Act, 1958, and aircraft registered under the Aircraft Act, 1934.

Applicable for offence or contravention committed outside India^[38]

The provisions of this Bill are applicable to offences committed or contraventions made outside India if the contravention involves a telecommunication service provided in India or telecommunication equipment or network located in India.

Protection of action taken in good faith^[39]

 The Bill provides immunity against legal actions, including suits or prosecutions, to the central government, state government, or any other authority acting in good faith.

Endnotes:

^[1] (2012) 3 SCC 1.

^[2] (2012) 10 SCC 1.

[3] (2017) 10 SCC 1.

^[4](1997) 1 SCC 301.

[5] 1961 SCC OnLine SC 19.

^[6] Section 2(p).

^[7] Section 3.

^[8] Section 3.

^[9] Section 4.

^[10] Section 4.

^[11] Section 4.

^[12] Section 5.

^[13] Section 6.

^[14] Section 7.

^[15] Section 8.

^[16] Section 11.

^[17] Section 11.

^[18] Sections 12 and 13.

^[19] Section 14.

^[20] Section 16.

^[21] Section 16.

^[22] Section 19.

^[23] Sections 20 and 21.

^[24] Section 22.

^[25] Section 24.

^[26] Section 27.

^[27] Section 28.

^[28] Section 30.

^[29] Section 35.

^[30] Section 38.

^[31] Section 32.

[32] Section 32.

[33] Section 34.

[34] Section 36.

[35] Section 39.

[36] Sections 42 and 44.

^[37] Section 46.

^[38] Section 50.

^[39] Section 51.