National Digital Communications Policy 2018, perspective from Khaitan & Co.

Harsh Walia, Associate Partner, Khaitan & Co. has looked at some of the notable measures and shortcomings of the draft National Digital Communications Policy 2018 which have been outlined below. The views and opinions expressed in this article are those of the author and do not necessarily reflect views of DigiAnalysys.

Notable Measures:

Recognition of Telecommunication Services & Infrastructure: This will not only aid proliferation of telecom services, but also facilitate low-cost financing. The industry today is facing one of its toughest phases and low-cost financing is the need of the hour for most service providers who are languishing in debt and unprecedented losses.

Convergence: The overhaul of the legal and regulatory framework for enabling convergence of IT, telecom and broadcasting is certainly a step in the right direction. The current law has failed to keep pace with present day technology, where such convergence is already taking place on ground.

Licensing Reforms: The indicated reforms to the license framework seem to suggest that DoT looks to shed its image of a revenue-monger to a business-facilitator as charges, taxes and levies may be rationalised. In particular, spectrum usage charges may now only reflect administrative costs. This will be a breath of fresh air for the industry, whenever implemented.

Simplification of Processes: Arduous processes, especially those of the WPC and SACFA, along with bureaucratic red tape in cases such as obtaining right of way permissions, have been a long-standing concern. At present, even though online processes exist, they require submission of hard copies subsequently. These long-drawn procedures often dissuade foreign investment. One hopes that simple, time-bound process will be announced by DoT soon.

Scope of Infrastructure Providers: As a complete volte face from its earlier stand, where it had maintained that IP-1 could not own and share active equipment, but only install certain active equipment on behalf of TSPs, DoT now advocates for enlarging the scope of infrastructure providers by allowing them to share active infrastructure. In DoT’s view, this will promote deployment of common, shareable passive and active infrastructure. If this were allowed it will not only lead to significant cost saving for the industry, but also open avenues for other business for IP-1s.

Over the top (OTT) Players: In the past, licensed telecom providers have unanimously raised their concern over lack of regulation of OTT players. It has been indicated that there may be policy framework for OTT services going forward. While this may add to compliances for the OTT sector, it will ensure a fairly uniform and consistent regime for all stakeholders in the ecosystem.

Foreign Investment: Foreign players have traditionally been circumspect to enter the Indian telecom market due to cumbersome compliance obligations and capital requirements. The policy indicates that these may be relaxed to some extent. Also, if processes are simplified and license requirements are relaxed in line with international practices, it will surely attract participation from foreign entities.

Cloud Computing: The DoT has echoed the views provided by TRAI in its Recommendations as far as adopting a light touch regulatory approach with respect to cloud-based systems is concerned. While DoT has earlier pressed for the adoption of cloud computing in the preceding National Telecom Policy also, in this draft policy it has expressed that it wants to establish India as a global hub.

The policy suggests that improvements made be made to the OSP regime. Such improvements have been long due. We hope that its scope of application is clarified and that its compliances are streamlined.

Shortcomings:

Infrastructure Providers: One aspect where the draft NDCP has perhaps left IP-1s discontented is their continued exclusion from the Telegraph Right of Way Rules, 2016, which only applies to licensed telecom service providers at present. However, one hopes that gap will soon be bridged in the final version of the policy.

IoT/M2M: The policy speaks of creating road-maps to enable adoption of emerging technologies such as 5G, IoT, cloud computing, artificial intelligence and robotics DoT had earlier released a roadmap for M2M in 2015, therefore it will be interesting to see if they include any additional aspects in this version. Also, these roadmaps will have to be finalised at the earliest, otherwise India will find itself lagging behind global trends once again.

Data protection framework: While the DoT must be commended for envisaging to devise a sector specific data protection framework, one should also be mindful that a draft of the general data protection legislation for India is also expected to be released soon. The interplay between the two data protection regimes will be interesting but will also lead to challenges in terms of compliance.

Other Service Provider Registration: At present, the OSP regime is somewhat convoluted as on one hand it states that any entity providing ‘application services’ must obtain an OSP registration, on the other hand it does not expressly provide for any consequences for not obtaining an OSP registration. In our practical experience, we hear of cases where disconnection of telecom resources has been ordered by DoT in cases where an entity has failed to obtain the registration. Perhaps this aspect can also be clarified.

 

 

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