TRAI’s New Framework for Service Authorisations Sparks Industry Debate

The Telecom Regulatory Authority of India(TRAI) has recently released a consultation paper on the framework for service authorisations for the provision of broadcasting services. This is in line with the newly implemented Telecommunications Act, 2023. The move is set to impact several broadcasting platforms that utilise radio waves and spectrum for their services. These platforms are currently issued licenses or permissions by the government under Section 4 of the Indian Telegraph Act, 1885, which has now been replaced by the Telecommunications Act, 2023.

The Ministry of Information and Broadcasting (MIB) had previously sent a reference to TRAI, informing them that the Telecommunications Act, 2023 has been published in the official gazette of India. The ministry also shared a background note providing the details of the policy guidelines of various licenses and permissions issued by MIB and the relevant sections of the Telecommunications Act, 2023 that may have a bearing on the terms and conditions of authorisations.

The primary aim of this move is to harmonise the terms and conditions across various service providers. This will ensure that the terms and conditions for the authorisations of broadcasting services may be notified as rules under the Telecommunications Act, 2023.

In line with this, TRAI has released a consultation paper seeking comments from stakeholders by November 20 and counter-comments by November 27. However, this move has not been without controversy. The industry body COAI has voiced concerns over TRAI’s recent views on the service authorisations framework. They argue that the contractual nature of present licenses must be retained in the authorisation process for regulatory certainty and safeguarding long-term investors.

Telecom licenses in India are contractual agreements between the Department of Telecommunications (DoT) and telecom operators. These licenses are legally binding contracts that outline rights, obligations, and operational parameters to be followed by the telecom services. COAI believes that the authorisation process must continue to retain the contractual nature of the present licenses, as this will ensure uniformity, regulatory certainty, and protection to investors who commit long-term capital to the sector.

In the past, COAI has been actively advocating for a reduction in License Fee and had suggested the present rate be reduced from 3% to 0.5-1% and abolition of the USOF (Digital Bharat Nidhi) levy which is 5% of AGR. They had also suggested doing away with Performance Bank Guarantee (PBG), Financial Bank Guarantee (FBG) and Bank Guarantee for Spectrum Payments (prior to 2022 auction). However, these suggestions were not recommended by TRAI.

The Telecom Industry is also deeply troubled by the expanded scope granted to Internet Service Providers under the new authorization framework. While currently Access and National Long Distance (NLD) service providers have the exclusive right to offer leased circuits and Virtual Private Networks (VPNs) to third parties, the proposed enhancement of ISP authorization would unfairly disadvantage existing Access and NLD operators. These operators have earned their current market position through significant financial investments, including hefty entry fees and by satisfying stringent eligibility criteria.

COAI firmly believes that the above concerns from the industry are important to be addressed, so as to ensure a healthy and robust environment for the TSPs as well as the sector, to perform going forward. COAI shall look forward to working closely with the Government for discussions and amicable resolution of the issues going forward, to ensure the required growth and motivation for this empowering sector in India.