Scope
The
telecommunication sector in India is largely regulated through the Telegraph
act of 1885. Under this act, mobile communications, broadcasting, and cable
networks are included in the definition of the Telegraph. So, all of these sectors come
under the telecommunication regulation. To limit the scope of this assignment,
I will investigate the regulatory instruments in mobile telecommunication
services, which will include voice, text, and Internet services provided by the
mobile network service providers in India and the infrastructure related issues.
The Telecom Administrative Framework - Who
Regulates?
The
bulk of the administration is carried out by the Department of Telecom (DoT), which
operates both as the chief executive authority and as the entity responsible
for day-to-day regulations. The minister of state for communications has charge
of the DoT, and the Telecom Commission is tasked with the role of formulating
the policy and budget for telecom, getting it approved by the Government, and
implementing telecom policy in the country. The Telecom Commission is bound to
adhere to the National Telecom Policy and principles of administrative law.
The
Telecom regulatory authority of India was originally envisaged as an
independent regulator under the Telecom Regulatory Authority of India Act, 1997.
As we shall subsequently see, over time, this role has been steadily reduced to
that of an expert body limited to making recommendations on key policy issues
in telecom. While it still has the mandate to make rules regarding
interconnections and tariffs, these regulations cannot contradict the license
terms. The adjudication of disputes arising out of licenses and in relation to
grievances against orders and directions of the TRAI is the domain of the Telecom
Disputes Settlements and Appellate Tribunal (TDSAT). TDSAT Orders can only be
appealed to the Supreme Court
Spectrum
management is the domain of the Wireless Planning and Coordination Wing (WPC). The
WPC is divided into three groups: Licensing and Regulation, the New Technology
Group, and the Standing Advisory Committee on Frequency Allocation (SACFA).
SACFA is an inter-ministerial body that is tasked with making policy decisions
about spectrum allocation and management. It comprises representatives from the
Defence Ministry, the Airport Authority, the Home Ministry, the Wireless
Department, and the DoT. The Telecommunication Engineering Centre approves the
hardware and other infrastructure equipment used in telecom operations. The Telecom
Enforcement Resource and Monitoring Cell is the enforcement wing of DoT. It
monitors the activity of telecom companies to ensure compliance with the
regulatory framework. The Comptroller for Communication Accounts is responsible
for internal administration and disbursement of the funds of the Department of
Communications and for disbursing subsidies from the National Service
Obligation Fund
Telecom Regulations & Instruments
Typology Analysis
The policy and regulatory framework
governing telecommunications in India comprise various acts, guidelines, rules,
etc.
Legal Tools
The Indian Telegraph Act,
1885
The Indian Wireless
Telegraphy Act, 1933
Telecom Regulatory
Authority of India (TRAI) Act, 1997
Telecom Policies formulated
by the Government from time to time:
National Broadband Policy,
2004
National Telecom Policy,
2012
National Digital
Communications Policy, 2018
Below is the list of
regulatory instruments under broader heads. I will use the free bark typology
to classify the instruments.
Market Entry
The telecom sector is
constructed as a state monopoly. Private sector participation is only permitted
through licenses granted by the state. In 1994 as part of the liberalization of
the economy, the Government allowed the private sector to apply for cellular
mobile licenses for the metro and subsequently for the rest of the country.
Shortly after that, fixed-line telecom services and Internet services were
opened up for private participation
Instrument
type - Authorization as Regulation
Registration
The setting up of telecom
infrastructure in India requires registration as an Infrastructure Provider
Category – I with the DoT.
Any establishment that seeks to provide any services relating to telecom and
internet is required to register with the DoT. This registration is the first
step to acquiring licenses or permissions for setting up mobile towers, optical
fibers, and other infrastructure-related establishments
Licensing
With the implementation of
the New Telecom Policy (NTP) of 2012, the licensing regime for the telecom sector
underwent a radical transformation. Moreover, the NTP 2012 envisaged 'one
nation, one license'; hence, the 'unified license regime' was introduced.
Additionally, players in the industry went from having to obtain separate
Licences for different telecom services in India, such as national and
international long-distance services (NLD & ILD), internet services, etc.,
to needing just one license,
The unified license covers
all fixed, mobile, and satellite services and communication, both wireline and
wireless media. Authorization under the unified license (UL) comprises one or
more of the following services:
1. Access service.
2. Internet service (and
subsequent categories).
3. National long-distance
(NLD) service.
4. International long-distance
(ILD) service.
5. Global mobile personal
communication by satellite service.
6. Public mobile radio
trunking service.
7. Very small aperture
terminal closed user group service.
8. Indian national satellite
system mobile satellite system reporting service; and
9. resale of international
private leased circuit service
The UL is granted for a
period of 20 years from the effective date of authorization. This may be
renewed by the DoT, and such a term would be a co-terminus with the license. A
virtual network operator is granted a license of 10 years
Certification
The applicant for a license
is required to furnish a bank guarantee, as prescribed from time to time by the
relevant authorities.
Licensing fees are enormous, so there is a part payment scheme for the license
fees. To ensure smooth repayment of license fees, DoT requires the applicant to
provide a bank guarantee certificate
Tariff
Instrument
Type – Economic Tool
Price Regulation
Under Section 11 and Section
13 of the telecom regulatory authority of India act 1997, TRAI can regulate the
prices of telecom services in the national interest. In general, telecom prices
are not Government regulated. However, from time to time, TRAI imposes price
control regulations for national roaming, rural telephony, and leased lines and
sometimes for SMS charges and USSD charges
Instrument
Type – Informational Tool
TRAI, through various
guidelines and regulation, ensure that the service providers provide
transparent bills and displays all the changes in the billing document. This is
to protect the consumers from any hidden charges by the service provider.
Interconnections
In telecommunications,
interconnection is the physical linking of a carrier's network with equipment
or facilities not belonging to that network. The term may refer to a connection
between a carrier's facilities and the equipment belonging to its customer or a
connection between two or more carriers.
Instrument
Type – Economic Tool
Through the 'Telecommunication
Interconnection Usage Charges (Thirteenth Amendment) Regulations,' TRAI
directed slashing mobile termination charges by 57% from 14 paise to 6 paise
per. These price regulations are imposed after due consultation with the
industry
Instruments
Type – Informational Tool
All licensees will be
required to publish their standard interconnection contracts. TRAI has recently
released the Telecommunication Services Register of Interconnection Agreements
and all such other matters Regulations, 2019. A 'reference interconnection
offer' is a document issued by the service provider specifying terms and
conditions on which the other service provider may seek interconnection. A
service provider is required to register this document and any amendments or
modifications in the prescribed manner. This document is submitted to TRAI, and
TRAI is responsible for the resolution of any dispute regarding contract terms
between service providers
Spectrum
Created in 1952, the
Wireless Planning and Coordination Wing (WPC) of the Ministry of Communications
serves as the National Radio Regulatory Authority of India. It is responsible for
frequency spectrum management in India. There are different divisions/
departments which have been assigned distinct functions under the WPC Wing:
Licensing and Regulation (LR), New Technology Group (NTG), and Standing
Advisory Committee on Radio Frequency Allocation (SACFA). Of the three listed
divisions, SACFA is responsible for making recommendations on significant
frequency allocation issues, formulating the frequency action plan, making
recommendations related to ITU, etc
Instrument
Type – Economic Tool
Auction
The year 2010 represented a
watershed in spectrum management policies in India. Pre-2010, the spectrum was
administratively allocated and was linked to granting of a license by DoT. The first
auction for spectrum was held in the year 2010: spectrum in the 2100 MHz band
(3G) and 2300 MHz (BWA) was assigned through an online auction. Subsequently,
in its February 2012 judgment, the Supreme Court (SC) of India quashed spectrum
allocation based on an advertisement released in 2008 and ruled that
all-natural resources, including spectrum, should be granted through a
market-related process only, such as an auction. As contemplated in National
Telecom Policy (NTP), 2012, the UL regime delinked spectrum from the license
From 2012 to 2016, DoT
conducted multiple rounds of spectrum auctions through Simultaneous Multiple
Round Ascending (SMRA) method.
Infrastructure
Though telecom is no
longer a network industry, it needs a large infrastructure to provide wireless
services.
Instrument
Type – Authorization as Regulation
Permission
The Indian Telegraph Right
of Way Rules 2016 states that for the installation of telecommunications
infrastructure on public land, prior permission is required and guides on the
procedure to be followed for the same. Regarding private land, government clearance
is required after valid checks with proper compliance with local requirements (feasibility,
fire safety, etc.) have been met with
Instrument
Type – Transactional Regulation
Grants
In February 2021, the
Government introduced a Production Linked Incentive scheme for telecom and
networking products to reduce import dependency and boost domestic production
and exports. The scheme aims to transform India into a global manufacturing hub
for telecom equipment by encouraging telecom players (including networking
products manufacturers) to invest in India and incentivizing investments made
by foreign and domestic players.
The scheme incentivizes
industry players to incrementally invest in India, effective from April 1,
2021. Investments made from April 1, 2021, to FY25 will be eligible for support
under the scheme until FY26
Instrument
Type – Economic Tool
Subsidies
DoT has a mix of subsidies
and a grand scheme for investment in Green Technologies for telecommunication
infrastructure
National Security and Law Enforcement
The Indian Government has
always regarded the telecom sector as sensitive, and telecom licenses have
always had provisions specifically aimed at ensuring national security. There
has been a fear that unfriendly nation-states would be able to capture elements
or the whole of India's national telecom infrastructure, which could paralyze
defense infrastructure at a critical juncture. On the other hand, the
Government has always looked to be able to interact with and condition for the
private providers in order to crimes being conducted using these communication
networks. These twin concerns have wrapped themselves around the telecom
regulatory framework, resulting in the inclusion of various restrictions explicitly
aimed at the security of the network
Instrument
Type – Authorization as Regulation
Permission
In 2021, DPIIT and DoT allowed
foreign direct investments up to 100% in the telecom sector. However, each of
the transactions a foreign investment is to be scrutinized by the DoT, and the
entities will have to take permission before engaging in any foreign direct
investment transaction.
In addition to that, telecom
service providers and telecom companies have to take prior permission from the
DoT before procuring any instrument or software from any foreign country
Instrument
Type – Structural Tool
Data Localization
Every telecom service
provider company will have to store consumer data on servers located on Indian
soil. So that law enforcement agencies could intercept calls and messages
quickly. This is a structural tool to ensure the easy access and jurisdictional
power of law enforcement agencies with regard to telecom data. Before the
Mumbai attack of 2008, telecom providers could store data on servers located
anywhere in the world. Nevertheless, this created problems when law enforcement
agencies tried to intercept calls and messages during that time. So, after the
Mumbai attack, DoT put forward the regulation regarding data localization
Consumer Protection
Instrument
Type – Structural Tool
Default status of
international mobile roaming service
Every service provider
shall ensure that the international mobile roaming service is inactive by
default for all consumers and shall be activated only on the request of a
consumer, and once activated, it may be deactivated at any time on the request
of the consumer
Process Design
Under TRAI regulations, every
service provider shall establish or allot separate toll-free shortcodes to
enable the consumers to seek information regarding tariffs, complaints, and
service-related information, through SMS
Instrument
Type – Informational Tool
· Information to consumers on
activation of international mobile roaming service
· Information to consumers on
selection of tariff
· Information to consumers at
different stages of exhaustion of entitled data usage
· Information to the consumer
who may initiate use of international mobile roaming service in a country or
area not covered by the tariff subscribed or where the applicable tariff
differs from the subscribed tariff
TRAI Apps and Portals
TRAI developed a number of
apps and portals to manage preferences, complain about spam, and to provide
various kinds of information to the Consumers, like finding header information
for unsolicited calls and messages
Performance Indicators
There is a Performance
Indicator Monitoring Platform developed by TRAI to collect information
regarding the quality and service status of telecom service providers and
provide that information to the consumer
Mobile Number Portability
Instrument
Type – Structural Tool
Process Design
Earlier, consumers had to
face problems regarding mobile number portability as the service providers were
not ready to lose customers. To get rid of this problem and to give consumers
more power, TRAI designed a process for mobile number portability. Customers
can now, from any mobile network, send an SMS to 1900 and get a unique code for
the porting process. This way, the telecom subscribers add no pull to play in
18 barriers for porting to another mobile network
Classification of Instruments
According to Evert Vedung's
classification, these instruments can be divided into three groups: carrots,
sticks, and sermons. The following table shows the classification:
|
Carrots |
· Product Linked Incentive Scheme for telecom investment in India
with indigenous technology. · Subsidies for Green Technologies
|
|
Sticks |
· Licensing for Market Entry · Registration as an infrastructure company to apply for a telecom
license · Certification for bank guarantee for the licensee · Price Regulation for specific kinds of tariffs and
interconnection charges in the telecom sector. · Permissions for building telecom infrastructure · Permissions for FDIs · Data Localization Norms · Process Design for Mobile Number Portability |
|
Sermons |
· Apps and Portals to provide information to the consumer. · Transparent Billing system · Performance Indicators · Contract information regarding interconnection |
Features of the Telecom Regulation in
India
In order to fully
appreciate the development of the Indian telecom sector, it is essential to
discuss some of the peculiar features that characterize the sector. These
characteristics operate as constraints on telecom operators and subscribers to
avail the full extent of the benefit that the sector could provide, while at
the same time operating as restrictions on the ability of the regulator to
administer the sector appropriately. There are five broad features that define
and continue to influence the shape of current and future regulations:
Anachronistic law - the sector is governed
by an old statute drafted in the pre-Internet age. As a result, the sector is
regulated on the basis of terms that were never intended to be interpreted in
the manner in which they are currently being used. This philosophy of wresting meaning out of words and phrases has become a
characteristic of telecom regulation and has led to much of the ambiguity that
is currently a characteristic hallmark of its administration
Regulation Through License - in the absence of a law,
the sector is almost entirely regulated through the license agreements that
telecom companies enter into with the Government. As a result, there is far
greater informality in the regulation of the sector than would have been the
case if regulation took place through laws or delegated legislation. Policy
changes are implemented through amendments to the license agreements, eschewing
the rules and regulations that are requirements under other statutes.
Two Regulators - the telecom sector
effectively has two regulators with distinct but often contradictory functions
who are often portrayed as being in opposition to each other. This gives rise
to a peculiar tension in the administration of the sector. While the TRAI was
originally established as the regulator, its power has been limited to tariff
review and management of quality of service. While the TRAI does make policy
recommendations, the DoT is not bound to comply with them.
Overlapping Influence - the sector regulators
operate amidst multiple, often overlapping, zones of influence that have an
impact on the process of regulation. The telecom ministry exerts an unusual
degree of influence. In addition, the telecom regulator is regularly subject to
oversight from independent regulators such as the Central Vigilance Commission
The Influence of New
Technologies
- telecom sector regulators have had to contend with the influence of new
technologies that constantly challenge the manner in which the sector operates.
Given the ambiguities in the manner in which regulations have been framed,
telecom companies are constantly trying to exploit loopholes in the law by
deploying new technologies that were never envisaged by the existing regulatory
framework.
Conclusion
The best thing that
happened to the telecom sector in the recent past is the telecommunication
policy of 2012. It introduces the auction mechanism in the spectrum allocation
that created a market for spectrum and helped in getting rid of problems or
scams like in the past with 2G spectrum.
Informational tools have
been used well by the telecom regulator, and they created an environment of
consumer protection and welfare. However, with the strict licensing
requirements and ambiguities in the law, there have not been new entrants in
the telecom sector, which compromises the competition.
While the regulations offer
a vast arsenal of regulatory ammunition to choose from, experience has shown
that, on balance, the Indian regulator is circumspect in deploying these
weapons. It is because of the appreciation of the regulatory reality that
exists on both sides of the table, both with the regulator and the regulated, that
telecom is the fastest growing sector in the country. For the most part, this
has been fuelled by the early regulatory decisions that ensured appropriate
levels of coverage and penetration
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