New act brings telecoms up to speed

The Telecommunications Act, 2023 (act), enacted on 24 December 2023, marks a significant milestone. Replacing out-of-date legislation – such as the Indian Telegraph Act, 1885, and the Indian Wireless Telegraphy Act, 1933 – the law is a dramatic shift in the telecommunications regulatory landscape. With its main objective to amend and consolidate laws related to the development, expansion, and operation of telecommunication services and networks, as well as spectrum allocation, the act sets the stage for transformative changes to the telecom sector.

Individuals or entities engaging in various telecommunication activities require authorisation from the Department of Telecommunications (DoT). This is mandatory for those providing a telecommunication service, a term encompassing any service involving the transmission, emission, or reception of messages through wire, radio, optical or other electromagnetic systems. Permission is needed for establishing, operating, maintaining, or expanding a telecommunications network, including equipment or infrastructure such as terrestrial, satellite or submarine networks used to providing telecommunication services. Lastly, consent is required to possess radio equipment.

The DoT may specify different authorisation requirements for particular telecommunication services, networks, or radio equipment and grant exemptions in the public interest. However, entities subject to authorisation should anticipate varying compliance conditions rather than outright exemptions. Public interest exemptions for routine or commercial telecommunication operations might be hard to justify, although certain types of telecommunication equipment could receive exemptions.

Various bodies may be affected by the act. These include existing licence holders, such as telecommunication service providers (TSP) offering telephone and similar services, operating telecommunication networks, and individuals possessing radio equipment. These entities can continue operations under their previous licences, permissions, or registrations, either for the period specified in those licences or for up to five years from the date notified by the DoT. Exempted entities will see their existing exemptions remain valid unless notified by the DoT.

Over-the-top (OTT) service providers, whose inclusion in the definition of a telecommunication service was contentious during drafting, are within the act’s ambit. While the act does not expressly include OTT providers, the broad definition of telecommunication includes the way OTT players transmit and receive messages. This has raised concerns within the industry. Manufacturers and importers of telecommunication equipment, subject to DoT standards and assessment for the manufacture, import, distribution and sale of such equipment are also affected by the act.

The act allocates spectrum mainly through auction, with exceptions for national security, public broadcasting, and other specified areas. It mandates biometric-based user verification mechanisms, addressing security concerns but also raising privacy issues. Users must consent before being sent promotional messages and they can report malware and cyber fraud, aligning with Telecom Regulatory Authority of India (TRAI) regulations. Right of way to install telecommunication infrastructure on public and private properties are granted, ensuring fair access and responsibilities.

The act retains the Universal Service Obligation Fund as Digital Bharat Nidhi, providing telecommunication services in underserved areas and supporting research and development. The act allows the government to intercept, monitor, or block messages on specified public safety grounds. Telecom services may be suspended during public emergencies. The government may establish standards for telecom equipment and infrastructure, ensuring quality and interoperability across the industry. Amendments to the TRAI Act, 1997, introduce stringent criteria for appointing chairpersons and members, enhancing the authority’s expertise and effectiveness.

The act establishes a comprehensive framework for hearing offences, with designated officers adjudicating. Appeals will be heard by appellate committees or the Telecom Disputes Settlement and Appellate Tribunal. To uphold industry standards and ensure compliance, offences carrying criminal penalties are classified as cognisable and non-bailable.

Ashima Obhan is a senior partner and Manisha Khalkho is an associate at Obhan & Associates.