The Department of Telecommunications (DoT) has floated the draft Indian Telecommunication Bill, 2022 that proposes to repeal the Indian Telegraph Act, 1885, the Indian Wireless Telegraphy Act, 1933 and the Telegraph Wires (Unlawful Possession) Act, 1950 while also significantly amending the Telecom Regulatory Authority of India Act, 1997.

However, the new draft is more than just a consolidation of the existing laws. In particular, the potential of mandating licensing for over-the-top (OTT) Internet services under the proposed law in particular calls for a nuanced analysis.

Information and Communication Technologies’ (ICTs) impact across education and healthcare; financial transactions, commerce, and logistics; transportation and tourism; government services and community engagement is ubiquitous. The pandemic only amplified it further as ‘Work from Home’ (WFH), telemedicine, distance education and online payments transitioned from geeky buzzwords into daily parlance.

India has seen rapid strides across the ICT domain over the past three decades. Besides mobile telephony, telecom licenses have been issued under the 1885 Act for Internet access, paging, VSAT and radio trunking, etc.

Persistent obstinacy

Since the commencement of Internet access in 1995, Internet telephony remained disallowed in India until March 2002. Following TRAI’s recommendations, DoT allowed Internet telephony from April 2002, albeit without interconnection with the Public Switched Telephone Network (PSTN) within India. In 2006, the Unified Access Service License (UASL) allowed unrestricted Internet telephony thereby paving the way for interconnect with the PSTN.

However, for almost a decade, India remained the only country in the world where unrestricted Internet telephony was legally permitted but not legally available. The situation changed only in 2016 when a new entrant offered Voice over Long-Term Evolution (VoLTE runs on Internet Protocol) en masse through its pan-India 4G network.

With the advent of smartphones and high-speed data connectivity, several innovative applications sprung up. Some of these have become extremely popular in genres like social media, messaging, and conferencing as well as fintech, entertainment and myriad of others.

In 2008, TRAI noted availability of large number of Internet telephony ‘applications’ used on “devices like personal digital assistants (PDA) or advanced mobile handsets” where the role of licensee was essentially limited to providing the underlying Internet access only. In 2017, TRAI reiterated that “Internet Telephony service is untethered from the underlying access Network”.

In multiple filings both in courts and with Telecom Regulatory Authority of India (TRAI), telcos have been arguing for, and indeed secured, multiple concessions on the ground of potential losses on account of Internet telephony. Obviously, the arguments sound like a broken record that has been playing on and on for the past 25 years!

Carriage, content differ

Roads and bridges provide the underlying infrastructure on which different type of vehicles can run. Likewise, multiple airlines can use the same airport infrastructure. Considering the strategic, exclusive, and rather limited public resources like the land and right of way, there are only a limited number of concessionaires for roads and airports.

Likewise, telecom licensees build, operate, and offer services for carriage of electromagnetic signals through wire or wireless. The former is typically copper or optical fibre while the latter includes microwave, mobile towers, and satellites. In technical terms these span the physical, data and network layers. Telcos are quick to enumerate their obligations, but they also enjoy certain exclusive privileges. These include access to exclusive spectrum in the license area, right of way (RoW), right to interconnection, assignments from the national numbering plan, and, orbital slots for communication satellites. The market consolidation has resulted in an oligopoly of just four operators. Even at the peak of hyper-competition a few years back, they used to be just 10-12.

Any type of content can be digitised and transmitted over packet-switched telecom networks. Hence, sheer possibilities are limitless for OTT innovation at the ‘application’ layer over the underlying telecom services. These include e-governance services like online tax returns and travel booking, interactive platforms like MyGov, E-commerce using ONDC (Open Network for Digital Commerce), and digital payments including UPI (Unified Payment Interface), etc. It’s impossible for OTTs to operate without the telecom infrastructure.

Even if one were to speciously accept the ‘Same Service, Same Rule’ argument such a regime must confer ‘Same Rights’. However, the OTTs cannot participate in the spectrum auctions, nor are they eligible for right of way to lay a cable. Clearly, they are not the same.

According to the Business Allocation Rules, Ministry of Electronics & IT (MeitY) is responsible for ‘all matters pertaining to Internet’ while carving out only the Internet access licensing for DoT.

It is quite fashionable to argue that OTTs operate in a regulation vacuum. Actually, OTTs are subject to the Information Technology Act, 2000 administered by MeitY. Data Protection Act would also apply once enacted.

OTTs may also have to comply with the sectoral regulations. For example, a mobile wallet would have to follow the relevant Reserve Bank of India norms.

Complementary, not competitive

For voice calls and text messages, 2G was good enough. However, it is largely the OTTs that drive both demand and fulfilment of ever-growing quest for higher data capacity across mobile, fibre and satellite technologies. In fact, voice call metering has been consigned to the annals of history by telcos’ own volition, well almost as most tariff plans are about data rates and volume.

Hence, telecom law and department must focus on creating conducive norms for expeditious expansion of telecom infrastructure while letting millions, even billions of OTTs bloom.

The writer is a public policy consultant