The move to overhaul the legal framework governing the telecom sector is well directed in many respects, but appears to vest discretionary powers in the State. The new framework, the Indian Telecommunication Bill, 2022, promises to usher in a slew of much-needed reforms including a separate set of rules to deal with insolvency for stressed telecom assets; easier merger and acquisition norms; a new body to administer the Universal Service Obligation fund, with the scope expanded to include economically unviable zones in urban areas; and providing an enabling framework that facilitates Right of Way for laying or building telecommunication infrastructure.
However, some of the other provisions in the draft Bill need more clarity if the Centre wants to steer clear of controversies. For example, the draft Bill grants the Centre powers to write off dues to any operator under extraordinary circumstances, including financial stress, consumer interest, and maintaining competition. There is a risk of this provision being misused unless there are clear guidelines under which an operator can ask for a waiver of dues. Can Vodafone Idea ask the Centre to waive off its dues of nearly ₹2 lakh crore under the new policy? Similarly, the draft Bill allows the Centre to assign spectrum administratively. While the auction route has not been done away with under the new framework, the Centre will have the discretion to decide on the mode of allocating spectrum. Given that the telecom sector has seen huge legal battles in the past over arbitrary allocation of spectrum, the Centre should put out a list of services for which airwaves will not be auctioned and take out the discretionary element. There is also concern over the proposal to amend Section 11(1) of the TRAI Act which may reduce the role of the telecom regulator.
There is no doubt that the fast-changing telecom scenario with the advent of technologies such as 5G needs to be governed under a new set of rules. The existing regulatory framework for the telecommunication sector is based on the archaic Indian Telegraph Act, 1885. The nature of telecommunication, its usage, and technologies have undergone a massive change, especially in the last five years. New communication technologies such as 4G and 5G, Internet of Things, Industry 4.0, M2M Communications, and Mobile Edge Computing require a new approach to policymaking. At the same time, the industry is going through a financial crisis as a result of which the telecom market has been reduced to a duopoly. The overall debt burden on the incumbent players has burgeoned to alarming levels due to expensive spectrum auctions and huge reductions in cash flows. Consumers are no better today than they were two decades ago when it comes to the quality of services. In this context the Indian Telecommunication Bill, 2022 is perhaps the most comprehensive overhaul of rules undertaken in the telecom sector. The Centre would, however, do well to utilise the consultation process to iron out the problem areas.