Draft National Digital Communications Policy 2018 Restructuring the Legal and Regulatory Regime

On 1 May 2018, the Department of Telecommunications (DoT) released the much-awaited Draft National Digital Communications Policy – 2018 (Draft Policy) for public comments. The Draft Policy aims to give direction not only to the telecom market but also to digital communications and prepares the country for the future. The policy, when finalised, will act as a framework for all future legal and regulatory changes/ development in Information and Communications Technology (ICT).

The Draft Policy proposes the restructuring of the legal, licensing and regulatory framework including amendments to the Indian Telegraph Act, 1885 and related legislation, so as to enable the utilisation of newer/ advanced technologies/ convergence. Many stakeholders would suspect the same shall result in unrestricted interconnection between the internet protocol (IP) and Public Switched Telephone (PSTN) networks. The Draft Policy intends introduction of a light touch regulatory regime for various services such as over-the-top (OTT) that allows providers to stream content via the internet, cloud computing, data centres, etc. The Draft Policy also makes clear the requirement to amend terms and conditions for other service providers (OSPs). It further suggests establishing a unified policy framework and spectrum management regime.

The Draft Policy also proposes amendment to the Guidelines for Mergers and Acquisitions 2014 in the telecom sector to enable simplification, the fast tracking of approvals and establishing exit norms for licensees including alignment with the Bankruptcy Code. The DoT has also realised the need to fix penalty provisions in light of reasonableness and proportionality. It is expected that the same will also follow principles of natural justice to better execute penalty notices, and not result in prolonged litigation.

The Draft Policy also clarifies government’s intention by recommending unbundling different layers (infrastructure, network, services and application layer) through differential licensing – reducing licensing and regulatory compliance requirements. It reiterates its commitment towards creation of a data protection regime and amendments to various licensing terms to incorporate provisions with respect to privacy and data protection, and the non-discriminatory treatment of content (along with appropriate exclusions and exemptions).

Broadband penetration and connectivity has been a key concern for the DoT and even the National Telecom Policy 2012 had focused on national broadband coverage. The Draft Policy suggests establishment of a National Broadband Mission and improvement of the existing telecom infrastructure especially by encouraging the sharing of active infrastructure by enhancing the scope of Infrastructure Providers and enabling infrastructure convergence of the IT, telecom and broadcasting sector. It recommends accelerated Right of Way permissions for telecom towers; apart from encouragement of investment in broadband infrastructure through fiscal incentives, including accelerated depreciation and tax incentives and incentivising fixed line and broadband.

It also proposes setting of International Cable Landing Stations by rationalising access charges thereby resulting in a reduction in cost of international bandwidth.

The Draft Policy recognises spectrum as a key natural resource for public benefit to achieve India’s socio-economic goals, optimise availability and utilisation of the spectrum. It aims to make adequate spectrum available for a new broadband era especially by optimally pricing the spectrum to make it affordable, liberalising the sharing, leasing and trading regime, coordinating with Government departments for freeing up underutilised/substitutable spectrum and its auctioning and/or assignment along with unutilised spectrum for efficient use.

Investment in the telecom sector has gone down significantly since 2012 and the stakeholders have repeatedly complained about lack of clarity on policy relating to newer technologies, convergence, innovation, investment, etc. The Draft Policy has tried to address the concerns of stakeholders with a target to attract investment of USD 100 billion in the digital communication sector, creation of innovation led start-ups, expansion of the Internet of Things (IoT) ecosystem, etc. It also suggests development of Standard Essential Patents (SEPs) in the ICT sector.

The DoT has proposed a simplified regulatory and licensing regime for cloud computing, data centres, content hosting and delivery networks, interconnect exchanges, AI, IoT, M2M, future and emerging services. It further outlines its intention regarding providing licensed as well as unlicensed spectrum for IoT/ M2M services, and a separate policy framework for OTT services

In a significant move (which may impact the ITeS sector especially the call centre businesses) the DoT has proposed amendments to terms and conditions for Other Service Providers (OSPs) including definitions, compliance requirements and interconnection. This may bring much needed clarity on several issues that were being faced by innumerable IT companies.

After initiation of mobile number portability, the DoT has mooted the idea of fixed number portability resulting in full number portability in the telecom sector.

To enable innovation, the Draft Policy plans implementation of recommendations in the National IPR policy: simplifying the policy for obtaining experimental licenses; and reducing entry barriers for start-ups. Further, the Draft Policy also recommends strict compliance to Preferential Market Access requirements for procurement of domestically produced telecom products.

Given increasing privacy concerns, it is not surprising that the Draft Policy emphasises the security and safety of data by establishing a comprehensive data protection regime for digital communications that safeguards privacy, autonomy and choice of individuals, and facilitates India’s effective participation in the global digital economy.

The Draft Policy proposes development of security standards for equipment and devices; participation in global standard setting organisations to ensure consideration of the needs of Indian ICT industries; and formulating policy on encryption and data retention. It reflects government’s intentions of developing a comprehensive plan for network preparedness, disaster response relief, restoration and reconstruction of the communications network.

The Draft Policy has tried to address some of the key concerns of stakeholders and licensees. The clear objective is to facilitate and propel economic and technological growth and investment.