Background:

The Telecommunications Act, 2023 (“the Act”) has recently received presidential assent and has been brought into place to replace the Indian Telegraph Act, 1885 and the Wireless Telegraphy Act, 1933 that govern telecommunications in India currently. Part III of the Indian Telegraph Act, 1885 will however, continue to be in force.

The key highlights of the Telecom Act:

1. Key definitions:

In order to understand the act, it is imperative to analyze the key definitions some such as:

Authorization: Authorization means a consent given, by whatever name called, allowed under this Act for-

1. providing telecommunication services;
2. Setting Up operating, maintaining or expanding telecommunication networks; or
3. Owning radio equipment

Facility Provider: Central Government or any authorized entity, including any contractor or sub-contractor or agent working for the Central Government or authorized entity, and shall include their successor or assignee are the facility provider.

Regulatory Sandbox: A live testing environment where new products, services, processes and business models which may be deployed, on a limited set of users, for a specified period of time, with certain relaxations from the provisions of the Telecommunications Ac are referred as Regulatory Sandbox.

Telecommunication: Telecommunication has a wider ambit and means the transmission, emission or reception of messages by wire, radio, optical or electromagnetic systems. ‘Message’ includes audio, video, images, text, data streams, intelligence, signals.

Telecommunication network: ‘Telecommunication network’ has also been defined broadly – it includes systems comprising telecommunication equipment and infrastructure, and includes terrestrial, submarine and satellite networks and combinations of these. The word ‘infrastructure’ has not been defined and its use enables widening the ambit of the definition to include active and passive infrastructure along with (potentially) third-party infrastructure services including cloud based services used by telecom operators to outsource or supplement their infrastructure (subject to the wording of the authorisations).

2. Extra-territorial applicability:

The Telecom Act's authority encompasses offenses committed outside India if the following three criteria are met:- (i) The act involves a telecommunication service provided within India; (ii) The act involves telecommunication equipment situated in India; and (iii)The act involves a telecommunication network located in India.

3. Grant of authorization and assignment of spectrum:

Authorization Grant: The Central Government is empowered to authorize individuals for (a) providing telecommunication services, (b) establishing, operating, maintaining, or expanding telecommunication networks, or (c) possessing radio equipment.

Validity of Pre-Act Licenses: The Act stipulates that any licenses, registrations, or permissions granted under the Indian Telegraph Act, 1885, or the Indian Wireless Telegraphy Act, 1933, will remain valid under the following conditions: (i) If the license, registration, or permit has a specified validity period, it will remain valid according to the terms and conditions and for the duration stated in the license, registration, or permit; and (ii) If the license, registration, or permit does not specify a validity period, it will be considered valid as per the terms and conditions and for a duration of five years.

Spectrum Allocation:

1. Spectrum can be allocated by the Central Government according to prescribed terms and conditions, either through auction or administrative process for entries listed in the First Schedule of the Act.

2. Portions of the spectrum may also be assigned to additional entities, referred to as secondary assignees.

3. The Telecom Act permits sharing, trading, leasing, and surrendering of spectrum, subject to approval from the Central Government.
4. The Central Government reserves the right to terminate any assigned spectrum, after providing the assignee an opportunity to be heard, if it deems the spectrum unused or insufficiently utilized for a certain period.

Validity of license given prior to the Act: The Act states that any spectrum assigned before its enactment will remain valid under the following conditions: (i) Spectrum allocated through auction will remain valid according to the terms and conditions specified; and (ii) Spectrum assigned through administrative process will remain valid as per the terms and conditions and for a duration of five years from either the date of the Telecom Act coming into force or the expiration date of the assignment, whichever is earlier.

4. Right of way:

Public Property:

1. A facility provider must submit an application to a public entity, which could include the Central Government, State Government, local authority, or any other authority established or incorporated by either the Central or State Government, that possesses, controls, or oversees a public property. This application is for obtaining permission for the right of way to establish a telecommunication network on, over, along, across, in, or upon such public property.
2. The public entity is obliged to grant permission for (a) conducting surveys to assess the feasibility of setting up a telecommunication network, and/or (b) accessing the property to establish, maintain, repair, expand, remove, or relocate any telecommunication network.

3. The application can only be refused on valid grounds, which must be communicated in writing.

4. In the event of any damage caused to the property by the service provider, the service provider is obligated to either restore the property to its original state or provide compensation for the damage incurred.

Property other than Public Property under Section 11:

1. A facility provider is required to submit an application to an individual who owns, controls, or manages an entity not mentioned in Section 11 of the Act, seeking permission for the right of way to establish a telecommunication network on, over, along, across, in, or upon such public property.
2.  Upon agreement between the facility provider and the property owner, controller, or manager, arrangements are made for (a) surveying the property to evaluate the feasibility of setting up a telecommunication network, and/or (b) accessing the property for the establishment, maintenance, repair, expansion, removal, or relocation of any telecommunication network.
3. If any damage is caused to the property by the facility provider, they are obligated to either restore the property to its previous state or provide compensation for the damage incurred.
4. In the event that the property owner, controller, or manager refuses to grant the right of way, the Central Government may intervene to grant the facility provider the right of way on such property, particularly when public interest is at stake.

Removal, Relocation, or Alteration of Telecommunication Network: Any individual entitled to do so may request the facility provider to remove, relocate, or alter the location of a telecommunication network.

Notice to Facility Provider: Prior notice must be given to the facility provider by any person intending to exercise their property rights in a manner that could potentially interfere with or damage the telecommunication network. Failure to provide such notice, resulting in damage or potential damage to the telecommunication network, allows the facility provider to seek intervention from the district magistrate. The district magistrate may then prohibit the person from dealing with the property for a month and take necessary action to prevent or rectify damage to the telecommunication network.

5. Powers of Central Government under the Telecom Act:

Power to notify standards and conformity assessment measures: The Central Government is empowered to establish and announce standards and conformity assessment measures concerning various aspects of the telecommunications sector. These include specifications for telecommunication equipment, identifiers, and networks, as well as guidelines for telecommunication services, manufacturing, importation, distribution, and sale of telecommunication equipment. Additionally, the Central Government is responsible for setting standards related to telecommunication security, cyber security, encryption, and data processing within the realm of telecommunications. These measures are in line with any regulations stipulated by the Telecom Regulatory Authority of India.

Power to take action in public emergencies or in public interest: The Central Government holds the authority to act during public emergencies or in the public interest. This includes the ability to seize control of telecommunication services or networks from an entity, as well as implementing response and recovery mechanisms. Moreover, in such situations, the Central Government, State Government, or authorized officers may take actions to safeguard India's sovereignty, defense, and security, maintain public order, and prevent the incitement of offenses. These actions may involve directing the cessation of message transmissions to or from telecommunication equipment and authorizing the interception or detention of such messages. Additionally, directions may be issued to suspend telecommunication services to or from specific telecommunication equipment.

Power to take action in cases of national security: The Central Government, with regard to national security, fostering friendly relations with foreign nations, or in times of war, has the authority to issue directives concerning various aspects of the telecommunications sector. These directives may include regulations on the use of telecommunication equipment, services, networks, and identifiers. Additionally, the Government may establish standards for the manufacture, importation, and distribution of telecommunication equipment, as well as set criteria for authorized entities or assignees. Furthermore, it may order the suspension, removal, or prohibition of specified telecommunication equipment and services originating from certain countries or individuals. Lastly, the Government may exercise control, management, or suspend the operation of telecommunication services or networks as deemed necessary.

Power to protect telecommunication network and telecommunication services: The Central Government is responsible for safeguarding telecommunication networks and services through various means. This includes gathering, analyzing, and sharing traffic data generated, transmitted, received, or stored within telecommunication networks. Additionally, the Government may designate certain telecommunication networks as Critical Telecommunication Infrastructure, recognizing that any disruption to these networks could have significant repercussions on national security, the economy, public health, or safety. In doing so, standards, practices, and other measures are established to ensure the protection and resilience of such Critical Telecommunication Infrastructure.

Power to create regulatory sandbox: The Central Government will establish regulatory sandboxes to foster and support innovation and technological advancement within the telecommunications sector.

Power to protect users: The Central Government will safeguard users through various initiatives, including obtaining prior consent from users for receiving specific messages, maintaining a 'Do Not Disturb' register to prevent users from receiving such messages, and implementing a mechanism for reporting any malware or specified messages received by users. Authorized users will also be mandated to establish an online system for users to report grievances, and the Central Government will develop a dispute resolution mechanism to address conflicts between users and authorized entities.

Power to direct furnishing of information: A designated officer, acting on behalf of the Central Government, has the authority to instruct the authorized entity to provide information, documents, or records if such documentation is required for ongoing or anticipated civil or criminal proceedings.

6. Adjudicatory Mechanism:

Breach of terms and conditions of authorization or assignment: In the event of a breach of the terms and conditions of authorization or assignment, the Adjudicating Officer (referred to as "AO") will issue an order. This order may include directing the authorized entity or assignee to take specific actions or refrain from certain actions to prevent further breaches of the terms and conditions. Additionally, the AO has the authority to impose civil penalties in accordance with the Second Schedule of the 2023 Act. Furthermore, the AO is empowered to make recommendations to the Central Government regarding matters related to the suspension, revocation, or reduction of the duration of authorization or assignment. Based on these recommendations, the Central Government may decide to suspend, revoke, or curtail the authorization or assignment.

Breach of the Act: The individual who feels wronged may submit a complaint regarding a violation of the Act to the Adjudicating Officer (AO). Subsequently, the AO will issue an order imposing a penalty as outlined in the third schedule of the Act.

Voluntary undertaking by authorized entity or assignee: Upon receiving notice from the Adjudicating Officer (AO), either the authorized entity or assignee must, at any point during the hearing process, provide a voluntary statement disclosing the contravention and detailing the steps taken to address it. If this voluntary statement is accepted, it will be acknowledged that the authorized entity or assignee has undertaken measures to mitigate the contravention. Such mitigation efforts will then be factored into the determination of civil penalties.

Designated Appeals Committee: Any individual who feels harmed by a decision rendered by the Adjudicating Officer (AO) is entitled to lodge an appeal with the Designated Appeals Committee. Moreover, subsequent proceedings before both the AO and the Designated Appeals Committee will be regarded as judicial proceedings as defined by sections 193 and 228 of the Indian Penal Code.

Appeal provision: The individual who feels aggrieved by a decision made by the Designated Appeals Committee has the option to file an appeal in a civil court with appropriate jurisdiction. This option remains available as long as the appeal concerns a violation of the Telecommunications Act under Section 33.

7. Offences and Penalties

Offenses under the Act are considered cognizable and non-bailable. Penalties and imprisonment as per the Telecommunications Act can reach up to a fine of two crore rupees and imprisonment for a maximum of three years.

Violations of the Act encompass activities such as providing telecommunication services or establishing telecommunication networks without proper authorization, causing harm to critical telecommunication infrastructure or networks, aiding, attempting, conspiring, or committing offenses outlined within the Telecommunications Act.

8. Conclusion

The Telecommunications Act 2023 is a complex piece of legislation with both merits and limitations. It offers a much-needed framework for updating India's telecom infrastructure and regulations, but its effectiveness will depend on its implementation and the regulatory environment it creates. Striking the right balance between promoting innovation, protecting user rights, and ensuring national security will be a critical challenge. Continuous monitoring, evaluation, and dialogue with stakeholders will be vital for ensuring the Act fulfills its potential for advancing India's digital future. The provisions of the Act have the potential to drive digital inclusion, foster economic growth, and enhance national security. It modernizes infrastructure, optimizes spectrum utilization, and streamlines regulatory processes, laying the groundwork for faster and more affordable internet access for all.

However, navigating this legislative framework comes with its own set of challenges. The increased regulatory scrutiny, while intended to ensure compliance, risks stifling innovation and competition, particularly for smaller players. However, through vigilance and collaborative efforts the Act deliver on its promise of a future-proof and inclusive digital landscape for India, reaping the benefits of technological advancement while safeguarding the rights and interests of its citizens.

Please find a copy of Telecommunication Act, 2023 here.

This update has been contributed by Jitendra Soni (Partner) and Harsh Garg and Ojaswini Mandhan (Associates).

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