HIGHLIGHTS OF THE TELECOMMUNICATIONS ACT, 2023 (“Act”)

Background

The Telecommunications Bill of 2023 (“Bill“) was presented to the Lok Sabha on December 18, 2023, and was passed by the Lok Sabha on December 20, 2023. Subsequently, the Bill was passed by the Rajya Sabha on December 21, 2023and received the assent of the President on December 24, 2023. The Act shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint and different dates may be appointed for different provisions of this Act.

Objective of this Act

The objective of this Act is to replace Indian Telegraph Act, 1885 and the Indian Wireless Telegraph Act, 1933 (“Telegraph Act(s)”) and to streamline the legislation pertaining to the establishment, growth, and functioning of telecommunication networks and services, and for other related or incidental purposes. The Act regulates the assignment of spectrum and regulatory framework for the Right of Way for Telecommunication Operators and lays down a compliance framework for easy and faster implementation of the legislation. This Act also intends to consolidate laws relating to development, expansion and operation of telecommunication services and networks in India.

Applicability of this Act

• The provisions of this Act shall apply to any person intending to provide telecommunication services;
• The provisions of this Act shall also apply to any person intending to establish, operate, maintain, or expand telecommunication network; or
• Any person intending to possess radio equipment.
• The Act extends to the whole of India; and to any offence committed or contravention made outside India by any person, as provided in this Act.

Key definitions under Telecommunications Act, 2023

• “Administrative Process” means assignment of Spectrum without holding an auction.
• “Appointed day” means such date as the Central Government may, by notification appoint under sub-section (3) of section 1.
• “Assignment” of a radio frequency or radio frequency channel means the permission for a radio station to use a radio frequency or radio frequency channel under specified conditions;
• “Facility Provider” means the Central Government or any authorized entity, including any contractor or sub-contractor or agent working for the Central Government or authorized entity and shall include their successor or Assignee.
• “Harmonization” means rearrangement of a frequency range;
• “Message” means any sign, signal, writing, text, image, sound video, data stream, intelligence or information sent through telecommunication.
• “National Frequency Allocation Plan” means guidelines issued from time to time by the Central Government for the use of the Spectrum.
• “Persons” shall include an individual, any company or association or body of individuals, whether incorporated or not, by whatsoever name called or referred to.
• “Re farming” means repurposing of a frequency range for a different use, other than for which it is used by an existing assignee.
• “Spectrum” means the range of frequencies of Hertzian or radio waves.
• “Telecommunication” means transmission, emission or reception of any messages, by wire, radio, optical or other electro-magnetic systems, whether or not such messages have been subjected to rearrangement, computation or other processes by any means in the course of their transmission, emission or reception;
• “User(s)” means a natural or legal person using or requesting a telecommunication service, but does not include person providing such telecommunication service or telecommunication network.

Highlights of The Act

This Act will regulate the Spectrum assignment process to the Persons (as defined above). The key feature of this process is that the Central Government may prescribe the terms and conditions applicable for the assignment of Spectrum. Such assignment of Spectrum shall be made by way of an auction save and except for the entries listed in First Schedule of Constitution of India. In addition to the above mentioned, this Act will aim to establish various mechanisms, by way of which, the Regulatory Authority or Central Government will safeguard the interest of both the Telecommunication companies and its Users. Such intent of the Central Government is evident from the key highlights which are mentioned below:

• Assignment of Spectrum: As per the Section 4 of this Act, the Central Government is the owner of the Spectrum on behalf of the people, and it shall have the power to assign the Spectrum in accordance with the Act. The assignment of Spectrum will be exercised through auction, except for entries listed in the First Schedule, for which the assignment shall be exercised without holding an auction.
  • The Central Government may, by notification, amend the First Schedule for assignment of spectrum (i) in order to serve public interest; or (ii) in order to perform government function; or (iii) in cases where auction of spectrum is not the preferred mode of assignment due to technical or economic reasons.
  • The Central Government may, by notification, amend the First Schedule for assignment of spectrum (i) in order to serve public interest; or (ii) in order to perform government function; or (iii) in cases where auction of spectrum is not the preferred mode of assignment due to technical or economic reasons.
  • Retrospective effect of assignment of Spectrum assigned by Administrative Process: As per Section 4 sub Section (8) of the Act, any Spectrum assigned through the Administrative Process prior to the Appointed Day shall continue to be valid on terms and conditions on which it had been assigned for a period of 5 (five) years from the Appointed Day or the date of expiry of such assignment (whichever is earlier).
  • Retrospective effect of assignment of Spectrum assigned by way of auction: As per Section 4 sub Section (9) of the Act, any Spectrum assigned through auction prior to the Appointed Day, shall continue to be valid on the terms and conditions on which it had been assigned.
• Re-farming and harmonization and Optimal utilization of Spectrum (Section 5): The Central Government shall have the power to re-arrange the frequency range for a different use other than for which it is used by an existing Assignee.
• Optimal, Flexible, liberalized and technologically neutral utilization of Spectrum: As per Section 6 of the Act, the Central Government may enable the utilization of the Spectrum in a flexible, liberalized and technologically neutral manner. Further, as per Section 7(i) of the Act, the Central Government may to promote optimal use of the available Spectrum, assign a particular part of the Spectrum that has already been assigned to an entity, known as the primary Assignee, to additional entities, which shall be known as secondary Assignees. Such additional assignment will not cause harmful interference in the use of relevant part of Spectrum by the primary Assignee.
• Right to terminate assignment or part of assignment by Central Government (Section 7(ii)): The Central Government will reserve the power to terminate any assigned Spectrum that has remained unutilized for insufficient reasons for such period as may be prescribed, subject to a reasonable opportunity of being heard given to the Assignee concerned.
• Establishment of monitoring and enforcement mechanism: The Central Government may establish monitoring and enforcement mechanism to ensure adherence to terms and conditions of Spectrum utilization and to enable interference-free use of the assigned Spectrum.
• Trading, leasing and surrender of assigned Spectrum: This Act is applicable on, sharing, trading, leasing and surrender of assigned Spectrum shall be permitted by Central Government, on such terms and conditions as may be prescribed by Central Government from time to time.
• Right of way for telecommunication network in public property (Section 11 of the Act): Any Facility Provider (as defined above) can seek permissions for right of way for telecommunication network under, over, along, across, in or upon any public property owned by a public entity under whose ownership, control or management, the public property is vested. Such permissions can be seeked for (a) survey such property for the purpose of assessing the feasibility for establishing telecommunication network; or (b) enter the property from time to time to establish, operate, maintain, repair, replace, augment, remove or relocate any telecommunication network.
• Right of way for telecommunication network in private property of any person (Section 12 of the Act): Any Facility Provider can submit an application to the person under whose ownership, control or management of property is vested, to seek right of way for telecommunication network under, over, along, across, in or upon such property. Upon receiving such request from the Facility Provider, the person may enter into an agreement, specifying consideration as mutually agreed and such permission shall be for (a) undertaking surveys as may be required by the Facility Provider of assessing the feasibility for establishing telecommunication network; (b) establishing, operating, maintaining, repairing, replacing, augmenting, removing or relocating any telecommunication network by the Facility provider; (c) The Facility Provider shall do as little damage as possible to the property when undertaking any of the activities for which the permission has been granted. The Central Government may by rules provide for the procedure to be followed by a Facility Provider for Right of way for telecommunication network in private property of any person. Further, if a Person fails to provide the right of way requested by any Facility Provider and the Central Government determines that it is necessary to do so in the public interest, then Central Government the permission to be given.
• Right of way in a non-discriminatory manner and non-exclusive basis (Section 13 of the Act): Any person providing right of way under section 11 or section 12, shall ensure grant of right of way to the facility providers in a non-discriminatory manner and, as far as practicable, on a non-exclusive basis.
• No right, title or interest (Section 14): No telecommunication network will have any right, title or interest in the property on which telecommunication network is established, except the right to use the property under Section 11 and 12 of the Act. The property on which telecommunications network is installed, shall not be subject to any claims, encumbrances or the liquidation. Further, Section 14 (4) a non-obstante Section in the Act lays down a condition on the public entities that, except without the prior written permission of an officer authorized by the Central Government for the purpose, shall have the authority to take any coercive action, such as sealing, preventing access, or forcible shutdown of the telecommunication network established by an authorized entity, except where such actions may be necessary to deal with any natural disaster or public emergency.
• Power of Central Government to establish common ducts and cable corridors (Section 15): Central Government will have power to establish common ducts or conduits or cable corridors, for the installation of telecommunication network. Such telecommunication network will be provided to facility providers, on open access basis, subject to fees and terms & conditions as may be prescribed from time to time.
• Power of Central Government to establish common ducts and cable corridors (Section 15): Central Government will have power to establish common ducts or conduits or cable corridors, for the installation of telecommunication network. Such telecommunication network will be provided to facility providers, on open access basis, subject to fees and terms & conditions as may be prescribed from time to time.
• Dispute Resolution (Section 18): The District Magistrate or any other authority (if notified by the Central Government) within whose jurisdiction property is situated, shall have the exclusive powers to resolve any disputes with regards to the telecommunication networks.
• Standards, Public Safety, National Security and Protection of Telecommunication Networks (Section 19, 21, 22 & 23):
  • Power to notify standards: Central Government may notify standards and conformity assessments measures in respect of telecommunication equipment, telecommunication identifiers and telecommunication network, telecommunication services, manufacture, import, distribution and sale of telecommunication equipment and further with respect to telecommunication security, cyber security and encryption and data processing in telecommunications.
  • Measures for national security: The Central Government may in the interest of national security, friendly relations with foreign states, take measures and issue directions.
  • Protection of telecommunication network and telecommunication services: The Central Government from time to time provide rules the measures to protect and ensure cyber security of telecommunication networks and telecommunication services. These measures may include collection, analysis and dissemination of traffic data that is generated, transmitted, received or stored in telecommunication networks.
• Powers of Possession or Suspension in the event of Public Emergency / Public Safety (Section 20)
  • Under Section 20(1), on the occurrence of any public emergency, the Central / State Government or any officer specially authorized, may take temporary possession of any telecommunication service or telecommunication network from an authorized entity or provide for appropriate mechanism to ensure that Message of a user or group of Users authorized for response and recovery during public emergency are routed on priority.
  • Under Section 20(2), under various grounds such as public emergency or public safety, and in the interest of the sovereignty and integrity of India, defence and security of the State, friendly relations with foreign States, public order, or for preventing incitement to the commission of any offence, the Central / State Government or any authorized officer can direct that; (a) any message, or telecommunication service, equipment, or network “…shall not be transmitted, or shall be intercepted or detained...” or; (b) any telecommunication service, network or equipment “…shall be suspended”. This power of prohibition, interception or detainment, including suspension, may lead to instances where abuse of power is exercised, considering the ambiguous / vague grounds of “public interest” or “public emergency”.
  • However, it is pertinent to note that correspondents accredited to the Central Government or a State Government cannot be intercepted or detained, unless an order to prohibit such transmission is passed under Section 20(2)(a).
• Digital Bharat Nidhi
  • Background: Digital Bharat Nidhi serves as a substitute for the Universal Service Obligation Fund (USOF). The context of the Universal Service Obligation Fund (USOF) in India is that, according to the Telecom Policy of 1999, funds for fulfilling the Universal Service Obligation (USO) were mandated to be generated through a ‘Universal Access Levy’ (UAL). This levy would be a percentage of the income earned by operators holding different licenses. The Universal Services Support Policy, which provides telecom infrastructure in rural and isolated areas of the country, became effective on April 1st, 2002. The Indian Telegraph (Amendment) Act, 2003, which granted legal recognition to the Universal Service Obligation Fund (USOF), was approved by the parliament in December 2003. The sole purpose of the Universal Service Obligation Fund was to be used exclusively for fulfilling the Universal Service Obligation.
  • The Universal Service Obligation Fund is renamed as the “Digital Bharat Nidhi” under the control of the Central Government. The objectives of the Digital Bharat Nidhi are that:
    • To facilitate universal service by enhancing accessibility and provision of telecommunication services in underserved rural, remote, and urban regions;
    • To foster research and development of telecommunication services, technologies, and products;
    • To provide assistance and advisory support through pilot projects and consultancy services;
    • To facilitate the implementation of telecommunication services, technologies, and products.
• Regulatory sandbox for Innovation and Technology Development (Section 27): The Central Government for the purpose of promoting and enabling innovation and technological development in telecommunication, create one or more regulatory sandboxes. For the purpose of understanding, “regulatory sandbox” refers to a live resting environment where new products, services, processes and business models which may be tested on a limited set of Users, for a specified period of time, with certain relaxations from the provisions of this Act.
• Protection of Users (Section 28): The Central Government shall take following measures for the protection of Users:
  • With prior consent of Users send Specified Messages or class of Specified Messages.
  • Will maintain “Do Not Disturb” register, to ensure that Users that have opted for this services, do not receive Specified Messages or class of Specified Messages.
  • Will set a mechanism to enable Users to report any malware or Specified Messages received even after they have registered for Do Not Disturb service.
  • Set an online mechanism to enable Users to register any grievance pertaining to the telecommunication services and redressal of such grievances.
• Duties of Users (Section 29): No user shall:
  • furnish any false particulars, suppress any material information or impersonate another person, while stablishing his identity for availing of telecommunication services; or
  • fail to share information as required by the Act.
• One or More online dispute resolution mechanisms (Section 30): The Central Government may establish one or more online dispute resolution mechanisms for the resolutions of disputes between the Users and authorised entities providing telecommunication services. Further, every authorised entity providing telecommunication services shall participate in the dispute mechanism established by the Central Government. It is clarified that these mechanisms shall not affect the rights of consumers under the Consumer Protection Act, 2019.
• Adjudication of Certain Contraventions (Section 32):
  • An Adjudicating Officer is defined as an officer of the Central Government not below the rank of Joint Secretary notified by the Central Government by an order published in the Official Gazzette. The Central Government will appoint one or more Adjudicating Officer to hold inquiries and pass orders for any contraventions in the manner as laid out under Section 32 and 33 of the Act.
  • Under Section 32, in the event of any breach of any of the terms and conditions of the authorization or the assignment granted under this Act, any Adjudicating Officer, may: (a) pass an order to direct such authorised entity to do or abstain from any act or thing to prevent any such breach; (b) impose civil penalties as specified under Second Schedule of the Act; (c) make recommendations to the central government for consideration regarding the suspension, revocation, or curtailment of the duration of the authorisation or assignment.
  • When imposing penalties specified in the second schedule, the Adjudicating Officer shall take into account the following factors in relation to the contravention:
    • Nature, gravity, and duration.
    • Number of Persons affected and the level of harm caused.
    • Intentional or negligent character.
    • Repetitive nature.
    • 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.
  • An authorised entity or Assignee, who has breached Section 32 or serial no. 4 of the third schedule, can submit a voluntary declaration to the adjudicating officer before receiving any notice or commencement of the determination process. This declaration discloses the contraventions and outlines the measures already taken or planned to mitigate such contraventions. The declaration will be considered when deciding on civil penalties, but the adjudicating officer may modify it with the consent of the authorised entity.
• Designated Appeals Committee (Section 36): The Designated Appeals Committee is set up under Section 36 and designated to hear appeals from Persons that are aggrieved by orders issued by the Adjudicating Officer under sub-section (1) of Section 32 or under Section 33.
• Appeals to TDSAT (Section 39): Under Section 39, any person aggrieved by an order of Designated Appeals Committee, if pertaining to matters under sub-section (1) of section 32, or an order of the Central Government under sub-section (2) of section 32, may appeal to the Telecom Disputes Settlement and Appellate Tribunal (constituted under section 14 of the Telecom Regulatory Authority of India Act, 1997), within a period of thirty days from the date of receipt of the order by such authorised entity or Assignee.
• Penalties (Section 42): The Act stipulates a number of civil and criminal offences. Providing telecommunication services or establishing a telecommunications network without proper authorization, damaging critical infrastructure of telecommunications, or gaining unauthorized access to a telecom network can lead to a prison sentence of up to three years, a fine of up to two crore rupees, or both. Non-compliance with the terms and conditions of authorization can result in a civil fine of up to five crore rupees. Possessing unauthorized equipment or utilizing an unauthorized network or service can attract a penalty of up to ten lakh rupees.
• Power of Seizure (Section 43): An Authorised Officer can conduct searches and seize equipment if there is reason to believe that unauthorised telecommunication networks, equipment, or radio equipment related to an offence under Section 42 is kept in buildings, vehicles, vessels, aircraft, or places.

Remarks:

The need for a re-structuring of the legislative landscape in relation to telecommunication regulations in India has been forthcoming especially in light of the recent developments, including planned entry of satellite communication services, concerns relating to imports and use of unregulated telecommunication equipment within existing networks, convoluted processes relating to spectrum allocation and under-utilization, SIM-fraud, along with advancement of telecommunication technologies. The Act is part of a broader objective of the Central Government to update existing laws to suit the contemporary business outlook, support India’s 5G roll-out, ensure efficient utilization and allocation of spectrum, and pull within the ambit emerging issues relating to telecommunication security & diversified telecommunication service structures within the scope of regulation. The Act also aims to achieve a more investor-friendly ecosystem, with reasonable penalties and simplified operations.

Another important point to note in context, includes clarification on the exclusion of OTT players following clarifications from the DoT on the intended scope of the Act, the said OTT players can look forward to content regulation & moderation, and intimation requirements to be introduced under laws proposed to be made applicable to the broadcasting sector including the draft Broadcasting (Services) Regulation Bill, 2023, which is under public consultation. It is pertinent to note that an earlier draft of the telecommunication bill expressly included OTT providers in the definition of ‘telecommunication service’ which would have led to such entities to authorizations and related covenants, however the Act has explicitly excluded the OTT providers from its ambit. Without prejudice to the aforesaid, the definition of ‘telecommunication’ still includes “all mediums of communicating a message”, particularly transmission and reception of message through electromagnetic systems, being the backbone of Internet technology relied upon by OTT players (including social media apps, video and media apps, voice call service) to disseminate their service. This overbroad definition may cause conflict in the OTT industry. With how the definition can be interpreted presently, a view may be taken where, since most OTT technologies cannot independently transmit or enable reception of any message which is possible through a combination of the Internet network and mobile/computer device, OTTs are not in fact in the business of providing any telecommunication service. Although, an official clarification issued by Ashwini Vaishnav, the IT Minister on December 22, 2023, that the Act does not regulate the OTT industry and said industry will continue to be regulated by the Ministry of Electronics & Information Technology (MeitY), has provided further clarity on the position.

Under Section 20(2), the “procedures and safeguards” regulating the prohibition, interception, suspension or detainment orders given by the Central / State Government or any authorized officer are yet to be prescribed, without access to which, it seems that there is a possibility of the government having unfettered power that can infringe on citizen privacy with little or no accountability. It is also important to note that the orders given under this Section 20 (1), (2) and (3) have no limit on duration or manner, raising the possibility of abuse of power by the Central / State Government or any such authorized officer. Any message or class of messages, to or from any person or class of persons, to or from any (or class of) telecommunication equipment, for example, mobile phone, laptop, server, communication infrastructure, etc. can be brought under the custody-authority for suitable actions under this Section.

In conclusion, the Act fails to address conflicts with the Digital Personal Data Act, 2023 in relation to the core understanding of prior consent of the data principal while sharing or collection of any form of data, and furthermore, under the Act, the government continues to retain unilateral control (arguably arbitrarily) on the interception of data. Considering the broad study of government’s rights under the Act, another pertinent topic of upholding one’s right to privacy is still unevaluated. The Act leaves a question mark on a future with unchecked government surveillance and a future where technology empowers, not oppresses. While the Act is a step forward toward data modernization, the implications on an individual’s liberty and right to privacy still requires unwavering attention and action.

 

 

The aforesaid points are for general knowledge purposes only and does not constitute any legal advice in any form whatsoever. We shall not be responsible for the accuracy and/or completeness of this document. The readers are advised not to act upon the contents of this document without referring to the actual texts of The Telecommunications Act, 2023 or seeking a detailed advise on the said subject.