India's draft telecom bill lacks clear legislative intent

The Draft Indian Telecommunication Bill, 2022 (Bill) issued by the Ministry of Communications for public and stakeholder feedback, adds layers of licensing and registration to an industry already plagued by a multi-approval regime. 

For instance, the Bill mandates providers of telecommunication services and networks to obtain a license (after agreeing to certain terms and conditions) to continue operations in India, while providers of telecommunication infrastructure are required to register with the Central Government. This runs directly contrary to the Governments avowed objective of, ‘less government, more governance’ and is likely to cause further unease for those intending to, or doing business in India. If implemented in its current form, the Bill would reintroduce a licensing regime akin to the Licence Raj.

While law cannot pre-emptively prescribe terms, and the framing of such terms is typically delegated to a Ministry, this leaves open the door for overreach. As past precedent has proven, licensing terms being overly onerous, transgress privacy rights, and mandate decryption of encrypted messages or allow interception of messages on vague grounds contrary to settled principles of law.

Telecommunication services and telecommunication networks that exist in India have been broadly defined by the Bill, clubbing entertainment related broadcasts that do not offer a conduit or platform for communication with messaging platforms. This is akin to considering cable television providers and FM radio services to be providers of communication, rather than ratify the traditional distinction of broadcasters from intermediaries who provided communication platforms.

The Bill’s import also appears to be deliberately wide – with an intent attempt to regulate any modes of communicating or disseminating information or news to the public, whether by broadcast or by traditional means of communication.

The Bill is also silent regarding its extraterritorial applicability, but any attempt to regulate telecommunication without defining a limitation on applicability raises fundamental questions of how the Bill intends to define the territorial limits of India. For example, the Telegraph Act, 1885 extends to the whole of India and its territorial waters and airspace. Similarly,  the Information Technology Act 2000 applies to a contravention committed outside India but only if such contravention involves a computer, computer system or computer network located in India. It is imperative that the Bill defines what degree of proximal nexus with India would attract its applicability. With advances in technology, telecommunication networks, such as satellite networks, now operate in a decentralised manner without strictly defined territorial boundaries. As countries rush to assert sovereignty over data and spectrum, blurred edges of territorial applicability are sure to create a conflict of laws.

While the definition of communication is intended to be a broad, and all-encompassing definition, the lack of licensing exceptions by way of carve-outs and exemptions is conspicuous by its absence. Given that courts have had to step in to interpret overly broad legislations in the past, the Bill needs clearly defined its ambit, territorial limits and intent.

The Bill needs to specify the rationale as to why it intends to extend the realm of licensing, to regulate over-the-top communication services, since the Intermediaries Rules 2021 and the Bill, when read together, would appear to pincer these messaging platforms into the vice of duplicitous compliance.

With any law that attempts to govern telecommunication networks including ecosystems of satellites, marine, and terrestrial networks, or any other means, the licensing regime must clearly extend only to the territorial limits of India. Naturally, this raises questions of whether the Bill would have any extraterritorial applicability, and if so, the exterritoriality would need to be clearly defined, without creating a conflict of laws.

The Bill intends to encourage and foster innovation and technological development in the telecommunication sector. However, access to the regulatory sandbox, cannot be predicated on licensing as currently envisaged in the Bill. While access to the regulatory sandbox can be conditioned on special terms and conditions, any license, registration, or authorization can only be granted after the product or technology is tested within the regulatory sandbox. 

Globally, a regulatory sandbox is introduced to deploy untested use-cases of innovative financial products, emerging technology, etc. within a controlled environment simulating real world scenarios. This allows sectoral regulators to assess unforeseen risks and unintended consequences of various use-cases that could not  otherwise be pre-empted. 

When an untested use case of technology sits in a regulatory ‘grey zone’, neither specifically banned, nor intended to be regulated, the regulatory sandbox tends to provide a controlled environment. Regulatory guardrails can then be set to protect consumer interest without stifling innovation, as laws regulating technology inevitably trail behind evolving technology. While new and disruptive technology must be tested within the confines of regulatory scrutiny, if the law that governs such technology cannot pre-empt and prescribe safeguards, it would be unfair then, to expect new technology to be pigeon-holed into rigidly defined licensing requirements.

The Bill also contemplates conferring upon the government the ability and power to take temporary possession of telecommunication services, networks, and infrastructure upon the occurrence of a public emergency or in the interest of public safety. However, it is imperative to note that the Bill does not define what duration constitutes ‘temporary possession’ nor does it chalk out the due process for such seizure. Neither does the Bill define what comprises ‘public emergency’ or ‘public safety’. 

Legislation need not be overly prescriptive when defining matters of public emergency or public safety, but past precedent points to a broad definition being prone to abuse. One is the abuse of the broad interpretation of the “public policy of India” to resist enforcement of foreign arbitral awards in the absence of a definition in the Arbitration and Conciliation Act, 1996. Another, is the abuse of the term “grossly offensive” or “menacing” under Section 66A of the Information Technology Act, 2000, till it was struck down by the Supreme Court. 

This is a stark reminder of how overly broad definitions can defeat good legislation, forcing courts to intervene to provide interpretative guidance. Against this backdrop, the archaic definition of public emergency and safety needs to be examined before being adapted for use in the Bill, to prevent its abuse.

Akash Karmakar

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Akash Karmakar and Sankalp Inuganti are Data privacy and technology lawyers at the Law Offices of Panag & Babu.

Sankalp Inuganti