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How Internet Services and Telcos are Regulated in India

The Telecom Regulatory Authority of India (TRAI) has published a consultation paper proposing a regulatory framework for internet services and applications (called ‘OTT services’). Based on the comparison below, it would seem that the proposal for licensing of internet services is a terrible idea.

Telecom Operators Internet Services / OTT Services
Regulatory Framework Access providers (internet and voice) and carriage services (national and international long distance) are governed by licenses issued under the Indian Telegraph Act, 1855. Online platforms and services are regulated as ‘intermediaries’ under the Information Technology  Act, 2000 and rules on privacy, security, content removal etc. thereunder.
Privacy Telcos must ensure privacy of communications and prevent unauthorised interceptions. They must also comply with the privacy rules in relation to collection, disclosure and transfer of information. The privacy rules are applicable to online service providers. Services related to healthcare, banking, finance etc. could attract additional obligations.
Content Telcos must implement measures to prevent unlawful content from being carried over the network. To qualify for safe harbours, online platforms must remove unlawful content and follow the blocking rules.
Security Telcos must install and maintain interception and monitoring systems at their own expense, with provisions for real-time monitoring of traffic. Government agencies must have direct access to this data. Certain executives like the CEO and CFO must be security vetted if he/she is a foreigner. The government can require online platforms and service providers to intercept, monitor or decrypt information under different rules.
Law enforcement Telcos must be able to pinpoint the geographical location of any subscriber, and provide a traceable identity of each user. Online platforms may be required to share identity related information for investigative purposes.
Encryption Telcos cannot employ bulk encryption. Prior permission is required for the use of encryption above certain limits, and the decryption keys must also be deposited with the government. The unified license has done away with this condition, and states that the IT Act will govern the use of encryption. Under the IT Act, the government can prescribe the modes or methods for encryption. Online platforms must assist the government with decryption of information or face criminal sanctions.
Penalties Breach of license conditions could result in termination of the license, and/or the imposition of financial penalties by the government. Non-compliance with TRAI regulations attract separate penalties. Online platforms can be held liable under various provisions of the IT Act, as well as the Indian Penal Code and other content regulations.
Financial Conditions Telcos must satisfy certain financial conditions to qualify for a license, An ‘entry fee’ and annual ‘license fees’ are also payable, besides ‘spectrum usage charges’ as applicable. N.A.
QoS TRAI can set service quality benchmarks with respect to call drops, billing, tariffs, customer service etc. N.A.
VAS ‘Value added services’ such as ring tones, caller tunes and multimedia can be offered to subscribers directly, subject to compliance with TRAI’s directives on billing, subscriptions, renewals etc. N.A.
VoIP Access providers can provide ‘internet telephony’ services, subject to certain restrictions. They can provide PC-to-PC, and IP –to-IP telephony, but calls originating from India cannot be terminated on mobile phones or landlines in India. N.A.

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About Amlan Mohanty

Amlan is a lawyer based in India. He has been writing about technology and intellectual property for the last five years.