India: Technology, Media & Telecommunications

Telecom Regulator Recommends Introduction of Virtual Network Operators in the Telecom Space

The Telecom Regulatory Authority of India ("TRAI") has issued its recommendations for introducing Virtual Network Operators ("VNOs") in the telecom sector vide press release no. 30/2015 dated May 1, 2015. Last year, the DoT, while exploring the possibility to permit entry to the VNOs, had sought the views of the TRAI.

The TRAI in its recommendations has proposed introduction of a licensing regime for the VNOs, allowing them to offer all segments of telecom services, including voice, data and video. The VNOs are service delivery operators that provide telecom services without owning spectrum or network infrastructure, but rely on the network and support of infrastructure providers.

In terms of the recommendations, the VNOs are to be introduced on the basis of the mutually accepted terms between a Network Service Operator and a VNO. TRAI also proposes that VNOs can be permitted to set up their own network equipment, in cases where there is no requirement of interconnection with other Network Service Operators. In the recommendations, it has been observed by TRAI that the terms and conditions of sharing infrastructure between network operators (such as Airtel, Vodafone and BSNL) and a VNO should be left to the market forces, with the TRAI or the DoT having right to intervene to protect the interests of consumers and the telecom sector.

In relation to the licensing regime, the TRAI has proposed a separate service authorization under the Unified License, which is the single license for all telecom services in India. The term of the license for the provision of VNOs is proposed as 10 years, extendable by further periods of 10 years.

One Nation – Full Mobile Number Portability: Inter Circle Portability Introduced in India

TRAI issued the Telecommunication Mobile Number Portability (Sixth Amendment) Regulations, 2015 vide its Press Release No. 15 of 2015, for full Mobile Number Portability ("MNP") initiating the implementation of the 'One Nation – Full Mobile Number Portability'.

Initially envisaged to be implemented from fixed May 3, 2015 as the deadline for implementation of full / inter telecom circle MNP was extended by the DoT to July 3, 2015, to enable the telecom operators to make technical modifications to their networks.

Implementation of full MNP would imply an inter telecom circle portability of mobile numbers, which presently is permitted only within the telecom circle of such user. The Telecom Commission, which is the highest decision making body of the DoT had given its nod to the implementation of full MNP in June last year.

The Telecom Regulator initiates a consultation on OTT Services and Net Neutrality - Seeks Comments on Proposed Regulations for OTT Services

TRAI on March 27, 2015 issued a 'Consultation Paper on Regulatory Framework for Over-the-top ("OTT") services' inviting comments from the stakeholders on the issue.

The TRAI observed that there is an ongoing debate worldwide among governments, industry and consumers regarding regulation of OTT services and net-neutrality.

The telecom service providers ("TSPs"), offering fixed and mobile telephony have witnessed large revenues owing to the online content in the OTT services and applications, such as WhatsApp, Skype, Viber and a gamut of others.

As on date, users can directly access these OTT applications online from any place, at any time, using a variety of internet connected devices. The chief characteristic of these OTT services for the TSPs is that the TSPs realize revenues solely from increased data usage by the devices for various applications and do not realize any other revenues, be it for carriage or bandwidth.

Presently, there is no legislation or specific regulations on net-neutrality and the OTT Services in India are being offered as part of the internet service package.
TRAI, by way of the present consultation process, had invited comments on the following:-

  • Policy and regulatory environment and the need for regulation,
  • Current policy dispensation for the OTT players vis-à-vis the TSPs,
  • Security concerns of OTT players providing communication services,
  • Issues related to security, safety and privacy of the consumer,
  • Issues arising because of net-neutrality,
  • Network discrimination and traffic management practices,
  • Non-price based discrimination of services and other pricing-related issues.

The consultation process witnessed millions of responses being filed with the TRAI by the telecom service providers, OTT players, industry associations and other stakeholders expressing their concerns.
The TRAI would issue its recommendation on the issues to the DoT, pursuant to this public consultation process.

The National Roaming Tariffs Set to Reduce by Virtue of the TRAI's Tariff Order

In a step towards implementing the One Nation – Free Roaming objective of the National Telecom Policy, 2012, TRAI issued the Telecommunication Tariff (Sixtieth Amendment) Order, 2015 (3 of 2015) vide Press Release No. 26/2015 dated April 9, 2015 ("60th Tariff Order"), reducing ceiling tariffs for national roaming calls and SMSes. The TRAI has fixed the limits on the tariff chargeable by TSPs. TRAI has also specifically made it mandatory to offer a special roaming tariff plan, which means a plan to be offered by the TSPs, where the subscriber would not be charged for an incoming voice call on national roaming upon payment of a fixed charge, if any.
The 60th Tariff Order would be implemented with effect from May 1, 2015.

Regular Consultations between the Telecom Department and Operators

The DoT has decided to hold consultations between the Telecom Secretary and executives of the telecom operators on a regular basis.

This move came subsequent to the spectrum auctions, which apparently left the telecom players unhappy with the hefty amounts they had to pay for buying back airwaves.

The DoT expressed its willingness to hear all the grievances of the industry and take steps to address them. For the initial meetings with the industry, the agenda would cover a road map on spectrum trading and sharing, spectrum availability and the plan about the quantum of spectrum to be auctioned for different bands.

Spectrum Auctions 2015

The Department of Telecommunications ("DoT") had put up spectrum in 4 bands of 800 MHz, 900 MHz, 1800 MHz and 2100 MHz, spread across the 22 telecom circle of the country for auction. The auctions were carried out in the months of February-March, 2015.

The auction process concluded last week after fierce bidding by eight telecom players over 19 days and 115 rounds. The telecom players involved in the auction included Airtel, Vodafone, Idea Cellular, Reliance Communications, Reliance Jio Infocomm, Tata Teleservices, Aircel and Uninor.

A total of 465 MHz of spectrum across the four bands (103.75 MHz in 800 MHz band, 177.8 MHz in 900 MHz band, 99.2 MHz in 1,800 MHz band and 85 MHz in the 2,100 MHz band) has been put up for auctions.

These auctions fetched the Government approximately INR 10,900,000,000 billion.

Earlier, a Supreme Court bench headed by Justice Dipak Misra had on February 26, 2015 allowed the scheduled commencement of spectrum auctions, but directed that the results should not be finalized without its approval. However, on March 26, 2015 the Supreme Court lifted a restraint order and allowed finalization of the auction result.

Some of the key highlights of the auction were:-

  • Bharti Airtel, Vodafone and Idea Cellular retained their 900 MHz spectrum holdings;
  • Reliance Jio Infocom managed to win CDMA band spectrum;
  • Although Reliance Communications lost in three telecom circles, but it became India's first and only operator with a nationwide footprint of the contiguous 800 MHz spectrum;
  • Uninor did not win spectrum in any telecom circle;
  • Aircel only participated in the bidding process for 1800 MHZ spectrum band, since it was disqualified from bidding for any new spectrum; and
  • The Maharashtra circle generated the most revenue, accounting for INR 10,822 crore for 14 MHz of spectrum.

In-flight Wi-Fi in India Likely Soon

According to certain media reports, the Department of Telecommunications is understood to have informally agreed to allow the use of Wi-Fi while in flight in the Indian air space

Presently, the internet connectivity service is not permitted for the Indian carriers and only foreign airlines such as Emirates, Lufthansa and Turkish Airlines offer internet connectivity on international flights.

Generally, Airlines provide Wi-Fi services by installing a server on board planes, which connects with a ground-based mobile broadband network or links to the satellites.

The use of Wi-Fi is a matter of regulatory clearances, similar to the use of mobile phones onboard even in the flight mode.

Supreme Court of India strikes down Section 66A of the IT Act as Unconstitutional

The Supreme Court struck down Section 66A of the Information Technology Act, 2000 ("IT Act"), vide its order dated March 24, 2015. This decision is widely been hailed as a major boost to freedom of speech online in India. The court struck down a draconian law that was poorly conceived, loosely worded and widely misused as a tool by the state machinery to muzzle free speech online.

The court, however, allowed the government to block websites if their content had the potential to create communal disturbance, social disorder or affect India's relationship with other countries.

The bench opined that the public's right to know is directly affected by Section 66A of the IT Act and the section clearly affects the right to freedom of speech and expression enshrined under the Constitution of India.

Further, the court observed that Section 66A of the IT Act was unconstitutional because it failed two major tests – the clear and present danger test and the tendency to create public disorder test.

The court also found the language used in the section vague and nebulous observing that the same does not appropriately define words like 'offensive' or even 'persistent'.

The court was of the view it cannot move forward on the government assurances that the provision would not be misused, as any such assurance would not bind on successive governments and thus, the provision would have to be judged on its own merits. The court observed that there is a difference between discussion, advocacy and incitement.

An Apex Court bench comprising of Justice J. Chelameswar and Justice R.F. Nariman had on February 26, 2015 reserved its judgement on one of the most controversial issues regarding the freedom of expression that the courts have dealt with in the recent times.

The government pleaded it did not want to curtail the freedom of speech and expression but contended that the cyber space could not be allowed to remain unregulated. During hearing however, the court had found several issues with the wording of the law. In particular, it said that terms like 'grossly offensive' and 'of menacing character', used to classify content as illegal, were vague expressions and these words were likely to be misunderstood and abused.

This section had been widely misused by police in various states to arrest innocent persons for posing their comments on social network sites on social events and political leaders. Section 66A of the IT Act gives arbitrary powers to the police to make arrests for anything deemed annoying – an entirely subjective term. Not only does it have the potential for being abused, the law attacks the root of liberty and fundamental right of freedom of speech and expression, the two cardinal pillars of democracy and is therefore the Supreme Court declared it as being unconstitutional.

The first Public Interest Litigation on the issue was filed in 2012 by a law student Shreya Singhal, who sought an amendment in Section 66A of the IT Act. This was filed after two girls – Shaheen Dhada and Rinu Srinivasan – were arrested in Palghar in Thane district as one of them posted a comment against the shutdown in Mumbai following Shiv Sena leader Bal Thackeray's death and the other 'liked' it.

Proposal to bring Electronic Media under the Press Council of India

The Press Council of India ("PCI") is presently considering a proposal to bring the electronic media under its own jurisdiction. The inclusion of electronic media would have to be done by carrying out certain modifications to the Press Council Act, 1978 to enlarge the scope of the legislation.

The Minister of State for Information and Broadcasting, Mr. Rajyavardhan Rathore, observed in a written response to a question by Congress MP Mr. S P Muddahanume Gowda in the Parliament on whether the government proposes to set up a common statutory regulator.

The Minister stated in his response that the PCI is in the process of deliberating and considering its earlier proposal for amendments to the Press Council Act, 1978 to bring electronic media under the jurisdiction of the PCI. However, this may be considered after receiving the views of Chairman of the PCI.

Justice Markandey Katju, a former chairman of the PCI, had earlier recommended setting-up of a Media Council and having both print and electronic media within its ambit.

The Parliamentary Standing Committee on Information Technology in its 47th Report recommended for the establishment of a statutory body to look into contents of all media, both print and electronic media. Even the Telecom Regulatory Authority of India, which operates as the regulator for telecom and media, in its recent Recommendations on Cross Media Ownership has recommended a single regulatory authority for print and electronic media.

Even the Telecom Regulatory Authority of India, which operates as the regulator for telecom and media, in its recent Recommendations on Cross Media Ownership has recommended a single regulatory authority for print and electronic media.

Supreme Court Orders Sharing of Live Feed of the World Cup Matches

The Supreme Court has permitted Prasar Bharti to share the live feed received by it from Star India Private Limited of on-going Cricket World Cup matches, with the private cable operators across the country.

In terms of its order dated February 20, 2015, the Supreme Court has extended the operation of its earlier interim order of February 10, 2015. In terms of this order, Prasar Bharti is allowed to share the live feed of the World Cup matches with private cable operators. On February 10, 2015 the Supreme Court of India stayed the execution of an order of the High Court of Delhi that barred Prasar Bharti, the statutory body set-up as the public sector broadcaster, from sharing the feeds of the upcoming 2015 edition of the Cricket World Cup with Doordarshan. The High Court had based its decision on the interpretation of Section 3 of the Sports Broadcasting Signals (Mandatory Sharing with Prasar Bharati) Act, 2007 ("Sports Signals Act") and Section 8 of the Cable Television Networks (Regulation) Act, 1995 ("Cable TV Networks Act"). The Sports Signals Act mandates that the broadcasters are mandated to share the feed of the sporting events with Prasar Bharti. Further, the Cable TV Networks Act requires cable operators to carry Doordarshan channels compulsorily over their networks.

Through the interim order, the Supreme Court had suspended the order passed by the Delhi High Court on February 4, 2015, which ruled that Prasar Bharti should telecast the coverage from the feed shared by the broadcasters only on its terrestrial and direct-to-home networks.

The Supreme Court, while pronouncing the said order, considered the suggestions put forward by the broadcasters. The Court did not accept the suggestion of setting-up an additional / alternative channel by Prasar Bharti. To this suggestion, Prasar Bharti had earlier contended the option to be unviable and technically unfeasible within a reasonable period of time and even was not inclined to consider availing the expertise and personnel offered by Star India for the purpose. Further, the Supreme Court also declined to accept the suggestion of putting a scroll indicating that the channel displaying the ICC World Cup 2015 matches is meant for Doordarshan only.

The order comes as a potential blow to Star India, which had paid nearly INR 300 billion to the International Cricket Council ("ICC") for exclusive rights for two World Cups and two World Twenty20 events proposed to be played between 2015 and 2023. During the course of the proceedings, Star India had also claimed that Prasar Bharti's tie-up with private cable operators was a dent on its six year commercial contract worth INR 38.50 billion with the Board of Control for Cricket in India ("BCCI"). Since, the Indian law mandates that two Doordarshan channels are to be mandatorily carried on cable networks, thus the operators for these cable networks could access sporting events on two different channels, i.e. Doordarshan and ESPN or Star, as the case may be. However, while ESPN or Star requires a subscription fee to be paid, Doordarshan is without any charge.

The Supreme Court stated that at this stage it ought not to consider the submission on behalf of the parties on merits of the case.

E-Commerce Likely to Come under Nine Ministries and Departments

The Indian Government is considering a proposal for the regulation of the e-commerce industry, which presently is facing criticism for heavy discounting, poor products, and delayed delivery services. The infuriated growth rate of the sector has startled the traditional brick and mortar businesses and demands have been raised for an oversight of the business practices. A Government panel would soon consider a proposal for potential regulation of the sector in India.

The Ministry of Consumer Affairs has issued a note for consideration of a Committee of Secretaries, citing its inclination towards developing a level-playing field between online and offline retailers. In the absence of specific regulations for online trade as compared to the brick and mortar (offline) business, those are set-up after a tedious process of licenses, approvals and permits, together with the supervision of Government authorities, presently there exists vast discrepancies between online and offline business.

The note proposes that e-commerce involves diverse activities, thus making it too complex to be under the purview of a single department or agency and necessitating a clear demarcation of activities. The draft note broadly identifies the following departments / ministries and earmarks responsibilities for the regulatory overview:-

Taxation Department of Revenue under the Ministry of Finance
Foreign exchange and banking Reserve Bank of India
Allegations and complaints regarding predatory pricing, unfair trade practice and criminal fraud Ministry of Corporate Affairs
Foreign Direct Investment (FDI) policy Department of Industrial Policy and Promotion, Ministry of Commerce and Industry
Data protection and cyber security Department of Electronics and Information Technology
Advertising and guidelines Ministry of Information and Broadcasting
Consumer grievances and consumer protection Ministry of Consumer Affairs

The relevant ministries / departments have been asked to give their view on the issues before the same are taken by the Committee of Secretaries.

Supreme Court Directs Google, Microsoft and Yahoo to Refrain Showing Ads for Sex Determination Tests

The Supreme Court of India has recently issued orders directing Google, Microsoft and Yahoo search engines not to advertise or sponsor any advertisement relating to sex determination tests since the same are in violation of the law.

The bench comprising of Justice Dipak Misra and Justice Prafulla C. Pant directed, as an interim measure, that Google, Yahoo and Microsoft shall not advertise or sponsor any advertisement which would violate the Pre-Conception and Pre-Natal Diagnostic Techniques Act, 1994. The order also directed the three internet giants to withdraw advertisements forthwith, in case the companies were carrying any such advertisements presently.

The said interim order has been passed during hearing of a petition filed by Sabu Mathew George in the year 2008 that sought direction for prohibiting sex determination test advertisements on the Internet. The court based the conclusion on the submission of the central government that the three search engines have relevant technology and deep-domain knowledge and expertise to block and/or filter words, phrases, expressions and sponsored links in this regard.

The Pre-conception and Pre-natal Diagnostic Techniques (Prohibition of Sex Selection) Act, 1994 under provisions of Section 22 prohibits advertisements related to pre-natal determination of sex and stipulates punishment for contravention of the said provision.

Counsel appearing for Google, told the court that the Internet was an uncensored medium and ordering the blocking of the information is very dangerous as it amounts to pre-censorship. In this relation to the contention of pre-censorship, the Court observed that censorship and legal provisions were two different things and anything can take the colour and flavour of advertisement. Human mind is ingenious and there is a scope for mischief. Counsel Divan informed the court that Google has already clamped down on such advertisements promoting sex determination techniques.

On behalf of the government it was said that the government can block links and stop showing any kind of thing that relates to sex selection and eventual abortion, if the URL and the IP addresses are given along with other information by the companies. However, alternatively it was submitted that these companies themselves can block these ads since they have access to their respective mathematical algorithms all the time.

The internet companies, Google, Yahoo and Microsoft contended that they were not in violation of the law since they merely provide a 'corridor' for content over the internet. Nevertheless, the Supreme Court said that an effort has to be made by these parties so that nothing contrary to the laws of India is advertised or shown on these websites.

The Court directed that matter to be listed for further hearing on February 11. However, in the meanwhile Google, Microsoft and Yahoo have been directed to carry out the Court's order on their respective policy page and terms and conditions of service page.

The Telecom – Defence Spectrum Swapping Receives Cabinet Nod

The resolution of the long pending spectrum swapping issue between the Department of Telecommunications, Ministry of Communications and Information Technology ("DoT") and the Ministry of Defence ("MoD") has received the approval of the union cabinet. The cabinet approved the swapping of 15 MHz of the 2,100 MHz spectrum band used for 3G services, presently with the MoD, in return for a release of an equivalent amount in the 1,900 MHz spectrum band by the DoT.

However, the DoT is of the view that it would take a year to harmonise the 15 MHz spectrum, conceding that the same would not be available for the forthcoming auctions proposed in February, 2015. The 15 MHz spectrum would only be available for sale after technical issues are sorted out, which process can take at least a year. Harmonisation refers to making spectrum contiguous, or continuous, for both the defence as well as the telecom services. This has the effect of increasing the efficiency of spectrum, without any added costs. The Telecom Commission, DoT earlier this week, while approving the base price for 3G spectrum, also signalled that only 5 MHz of 3G spectrum would be put up for auction.

Additionally, the cabinet has also earmarked 49 slots for defence use in the 3 MHz – 40 GHz spectrum bands, including 9 for exclusive defence use and 31 for defence use along with other agencies for sectors such as space, broadcasting and aviation, which are 50 km around border areas (categorised as defence interest zones). This would constitute as the defence band. However, for the remaining 9 slots, certain issues remain to be resolved between various ministries. In the defence interest zones, the spectrum would be used by telecom operators during peace time, however during war or hostility time, the areas would come under the MoD's jurisdiction.

Regardless, the decision of the cabinet puts an end to long tussle between the DoT and MoD on the defence band and swapping of spectrum. The spectrum swapping was in-principle agreed between the DoT and the MoD in December, 2014.

Further, it is understood from certain news reports that the DoT is considering a Swachh Bharat cess of 0.1 per cent on the service tax currently levied on telecom services; however a final decision will be based on inputs from various ministries. It is also expected that after the spectrum auctions next month, the government will announce the re-worked guidelines for mergers and acquisitions and spectrum sharing and trading, to bring about the much-needed consolidation in the telecoms sector.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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