Telecommunications Act, 2023: Promise & Challenges | Manoj Chugh & Shyam Sunder

The telecom sector has played a significant role in the growth and development of India. It has helped to provide employment to four million people. It serves 117.9 crore subscribers, contributing to 6% of GDP, growing at a CAGR of over 9%.

The current telecom framework, is based on outdated laws dating to the 19th Century that badly need an overhaul, given the rapid technological advancements, the advent of next generation services pivoted on Digital and the fast-changing demands of our citizens. The Government’s focus on Digital Public Infrastructure requires the underpinning of a modern, robust and secure telecom infrastructure whilst leveraging the current momentum in the sector. The introduction of the Telecommunication Act, 2023 capitalizes on this opportunity, providing clarity to all stakeholders. The Act, creates a policy framework that rewards innovation and speeds up the provision of New Age Services.

What the Act addresses can be classified under four broad buckets. First, modernization and streamlining, which has resulted in the removal of more than 100 compliance burden. An updating of the outdated legal framework, a simplification of licenses and procedures, and fostering competitiveness by aiming to create a more dynamic and efficient regulatory environment. Secondly, infrastructure development which emphasizes creating a conducive environment for infrastructure expansion. It includes provisions for streamlining ‘Right of Way’ acquisition, financial incentives for private investment, and measures to optimize spectrum usage and allocation. Thirdly, national security and public safety which empowers the government to manage telecom networks during emergencies and authorizes lawful interception and surveillance under specific circumstances. It focuses on safeguarding national security and public safety while raising concerns about potential misuse and privacy violation. Fourthly, consumer protection and balancing interests which attempts to address user concerns by establishing grievance redressal mechanisms and outlining data privacy provisions. It balances the goals of innovation and competition with consumer protection and safeguarding user rights.

Other key aspects of the Act include focus on emerging technologies which acknowledges the evolving nature of the sector and strives to adapt to future advancements and focus on the digital economy. The Act’s focus on future-proofing and adaptability could provide a supportive environment for 6G research and development, paving the way for next-generation technologies that leverage Artificial Intelligence (AI) extensively.

Infrastructure development fueled by the Telecommunications Act, 2023 could contribute up to 1.5% to India’s annual GDP growth by 2025. This translates to a potential gain of ₹5.6 lakh crore per year. Similarly, expanding access and affordability of digital services through improved connectivity could unlock an additional ₹3.4 lakh crore in gross value added to the Indian economy by 2025. The telecom sector and related industries could see significant job creation, potentially adding up to 4 million new jobs in the next few years.

The potential benefits of the Indian Telecommunications Act, 2023 for the Indian economy are multifaceted. New Age Services catalyzed around Satellite Communications could see a major impetus. The Act acknowledges future technological changes but anticipating the full impact of the evolving nature of telecommunications is not easy. Imbibing established international best practices in areas like privacy and regulation could go a long way in positioning India’s Leadership on Regulation. The Bill was drafted and introduced without meaningful public consultation, raising concerns about its democratic legitimacy. Therefore, as part of the process of implementation, the Rules and potential amendments require active engagement with all major stakeholders, both, large and small, to help ensure seamless implementation. Concerns will have to addressed as the Rules are framed.

In terms of inclusiveness and affordability, how effectively Digital Bharat Nidhi will bridge the digital divide between rural and urban areas remains to be seen. Underserved communities have to be brought into the mainstream at the soonest possible. Measures for ensuring affordable access to digital services and data plans, particularly in the less served rural areas, have to be addressed on priority. While offering grievance redressal mechanisms, the Act might need stronger provisions to effectively protect consumer rights and interests against potential unfair practices. The “Do Not Disturb” Registry needs to be enforced. India has led Net Mobile Subscriber Additions consistently over the last few years. With the requirement of users to now provide verifiable biometrics-based identification in order to avail of services, there could be a direct impact on subscriber growth and concerns around data breaches and misuse of Privacy. Biometric information is personal data and its use is protected by Fundamental Rights to Privacy. The entire population’s private lives are subject to intrusion because of the misdemeanour of a few. Alternate less intrusive identify mechanisms like Voter ID Card etc along with KYC norms maybe used as an alternate.

Whilst Telecommunication Services which may cover may cover a wide range of services provided using internet such as messaging, calling, and video conferencing have not been explicitly defined and the sourcing of networks and services rightfully limited to trusted sources only, new age service providers may look for additional support or exclusions from some of the stringent provisions. The Act does not explicitly exclude such services from its purview; these are already covered under the Information Technology Act, 2000, Potential concerns including those around overzealous centralized control may impact private investment. Clarity on the oversight for OTT platforms in the Act needs to be provided. Broad surveillance powers raise natural concerns about potential misuse. An independent oversight mechanism, like the one implemented in some developed Countries may help. A fine balance needs to be drawn up between the needs of national security and rights of individuals and confidence will have to be built that the Oversight mechanism is fair and non-partisan. The Act grants the government the power to impose telecommunication shutdowns in vaguely defined "public emergencies", which could be potentially abused for political milage. The Oversight mechanism should be reviewed since separation of powers is important in such matters. From a practical perspective it is hard to imagine that the Senior Government Official would ever doubt the action of enforcement agencies, on grounds of protection of the State. In several developed Nations, judicial authorisation of interception is mandated. Further, issues relating to Privacy get further muddied under the garb of security is the power to intercept, monitor or block communications where a word of a set of words is used. This lowers the degree of privacy of communication for all users. Whilst it is clear that Surveillance may be necessary at times in the interest of National Security, however, the need to lower the degree of privacy of all communications of all users of a network to filter a few messages needs deliberation. The Supreme Court has held that infringement of the right to privacy should be proportionate to the need for such interference. Proportionality suggests an independent mechanism to determine the same.

To sum up, the potential benefits of the Indian Telecommunications Act, 2023 for the economy is significant, but they must be weighed against the potential downsides. Addressing concerns about government overreach, surveillance, privacy, inclusivity, and future-proofing will be crucial to ensure the its effectiveness and maximize its positive impact on the economy. Ultimately, the success of the Telecommunications Act 2023 will depend on its quality, transparency in its implementation, and its ability to address concerns while adapting to the evolving economic and technological landscape.

(Authors: Manoj Chugh (chugh_manoj[at]yahoo.com) is Chairman of Manoj Chugh Advisory LLP, Shyam Sunder (shyams.eco[at]gmail.com ) is working with an Indian Corporate. Views are personal)