Draft Telecom Bill: Negative impact on digital ecosystem, say tech companies

The “overbroad” definition of telecommunication services in the proposed telecom Bill could “have a negative impact on India’s digital ecosystem,” BSA -The Software Alliance, said in its submission to the Department of Telecommunications (DoT). The Information Technology Industry Council (ITI), another industry group, has told the DoT that terms such as “internet-based communication services” and “interpersonal communication services” that are part of telecom services under the proposed Bill have not been defined clearly, which “can lead to regulatory overlap and ambiguity”. The Indian Express has reviewed both BSA and ITI’s comments to the draft Bill.

In September, the DoT had released the draft Indian Telecommunication Bill, 2022, in which it proposed regulating communication services including voice, video, and data offered by over-the-top (OTT) platforms such as Whatsapp as telecom services, requiring them to obtain a licence from the government just like other telecom operators.

In the draft Bill, the government has included internet-based and OTT communication services such as WhatsApp calls, Facetime, Google Meet etc. under telecom services, addressing a long-standing demand by telecom operators which have on several occasions called for a level playing field. At present, while telecom companies need a licence to offer services, OTT platforms do not.

However, BSA said that the government’s approach is an “outlier” compared to other jurisdictions where licensing requirements for internet-based services is “uncommon”. “Governments of other countries are typically unwilling to extend the scope of what constitutes a telecom service to cover IT and digital services and products,” it said, adding that in geographies like the European Union, Australia, South Korea and the United Kingdom, regulators have not imposed stringent telecom and licensing requirements on digital services.

ITI said that the International Telecommunication Union has not prescribed any regulatory mechanism for OTT communication services. It added that India has made certain commitments at the World Trade Organization (WTO) for both national treatment and market access for certain telecommunications services, which such new licensing procedures could “nullify”.

“The overbroad definition of telecommunication services will extend licensing and authorization requirements over the wide range of IT and digital services. In case of non-compliance, the Bill also sets a significant and disproportionate penalty (includes both imprisonment and hefty fines) on these service providers,” BSA said. “This will pose significant risk for IT and Digital businesses in India and will likely throttle Internet-based innovation as well as the nascent Indian start-up ecosystem.”

Meanwhile, the DoT on Thursday night yet again extended the deadline to submit comments to the draft telecom Bill, with the new deadline being November 20.