Centre introduces draft telecom bill with simplified M&A framework
The Department of Telecommunications (DoT) has released the much-awaited draft of Indian Telecommunications 2022 Bill. The telecom department has put up the bill for public consultation, and will welcome comments from stakeholders till October 20. The bill will simplify the framework for mergers, demergers, and acquisitions. Companies will only be required to intimate the licensing authority under the new telecom rules.
Why does this story matter?
The new telecom bill, which is a combination of the Indian Telegraph Act, 1885, the Wireless Telegraphy Act, 1933, and the Telegraph Wires (Unlawful Possession) Act, 1950, is expected to be tabled soon. It aims to simplify the existing processes to boost the telecom sector. A worrying aspect, however, is the extent of power the government will have now.
Centre can allocate spectrum through non-auction methods
The draft bill says that auction will be the key method of allocating spectrum. However, it also seeks to empower the government to assign spectrum through administrative process or non-auction methods for radio backhaul spectrum and public sector industries. In non-auction cases, the government will prescribe the frequency range, price and fee, methodology for pricing, duration, and procedure.
Government will have the power to grant exceptions to licensees
If a licensee fails to pay any amount, the draft bill empowers the government to defer such payment, convert part/all of such payments to shares, write off such amounts, or give relief from payments. The government will also have the power to waive the fee, interest, or any other charges payable by a licensee. It can grant exceptions from the provisions of the act.
New definition to include OTT and satellite-based communication services
The government seeks to increase the ambit of telecommunications services with the draft bill. Accordingly, the new definition will include over-the-top (OTT) services, satellite-based communication services, internet and broadband services, and in-flight and maritime connectivity.
Spectrum returns to Centre in case of insolvency
If an entity undergoes insolvency and is unable to provide any service or pay dues, according to the bill, the spectrum will revert back to the government. However, if a telco continues to provide services, make payments, and complies with modified terms and conditions despite undergoing insolvency, the government can assign another person or entity to manage operations for a certain period of time.
Government can take over telecommunication services during war
In case of war or any other threat to national security, the government can take over the management and control of telecommunication services. It can also suspend the same or entrust it to any authority. The Centre/state governments or any authorized officer will have the power to censor the transmission of any message or class of messages during any public emergency.
Breach of license conditions will result in revocation
In case of breach of license conditions, the government can revoke the license. It can also impose a penalty. Penal provisions have been relaxed. They will depend on the severity of the breach and can range from a written warning to a fine of Rs. 5 crore. The Centre also has the power to reverse the suspension, revocation, or curtailment.
