The Convergence Bill recently introduced in Parliament seeks to address the possibilities arising from convergence. While this is a welcome move, it has not inspired much confidence in the industry. There are fears that certain provisions are restrictive, and even downright draconian. Legal experts pick the pitfalls in the bill and suggest some amendments.

What are the major weaknesses of the Convergence Bill?

Mohit Saraf
The Convergence Bill is landable initiative to address the possibilities of convergence. Some areas of confusion are inevitable in any new legislation and will get addressed over time. A lot of criticism has already been made on the draft bill, beginning with the fear that the Communications Commission of India (CCI) will be a puppet in the hands of the government. The draft bill states that the commission, in exercising its licensing and regulatory functions, will follow written policy directives issued by the center from time to time. The option to determine what is a “policy matter” of course lies with the government, but is subject to judicial review. If this leads to “backdoor control of the media”, the bill will miss its point.

The same nerve was hit by the criticism that the government’s decision to set up a content bureau under the proposed CCI in order to regulate the internet and electronic media would bring in pre-censorship. According to the government, the CCI, under which there would be content and carriage bureaus, would be independent. Though the government would appoint members to the regulatory body, it would have no control over their functioning. The CCI would be in a crucial position as a “super regulator” responsible for spectrum management, granting and enforcement of licences, and determining tariffs. First, the fact that the CCI has been assigned simultaneous regulatory and adjudicatory functions militates against the basic principle of natural justice that states that nobody can be a judge in one’s own case. The CCI, which will regulate the activities and lay down the guidelines for the functioning of service providers, cannot be expected to impartially arbitrate between themselves and between them and the consumers. Second, the idea that the members and chairperson of the CCI would be appointed by the center should be shot down. It would be ensured that they are selected through a transparent process on the basis of the recommendations of a committee represented by the government, the judiciary and the opposition. Further, there is anxiety in the industry regarding the CCI’s power to grant and revoke licences. While DoT is reportedly in favour of regulating content application and value-added services, the Ministry of Information Technology is opposed to the move. The CCI has also been empowered to license the possession of “wireless equipment”. The definition of “wireless equipment” in the bill is so wide that, if adopted, a large number of electronic equipment of daily use, like mobile phones, pagers, computers and peripherals with infra-red devices would require registration and licensing. While there may be some virtue in conferring licensing powers on a regulator, one should not lose sight of the fact that our policy is an ideal case of overregulation and undergovernance.

Ravinder Singhania
There are inadequacies of vision that are evident from a plain reading. The definitions are vague and unclear. Vast amounts of discretionary powers still remain vested in the government. The bill is silent on cross-media holdings. It also does not spell out the exact scope of value-added application services. The bill provides for the creation of CCI. However, the CCI may be neither independent nor impartial. Though it has been given the discretion to grant licences, the centre has retained the power to take the final decision on licensing issues.

Ramji Srinivasan
While the Convergence Bill is a welcome attempt by government to coalesce various disparate legislations, one needs to understand why it has not inspired much confidence in the industry. The definitions set out in the bill are complex and difficult to comprehend. The licensing requirements have been increased instead of being simplified. A basic or cellular operator is permitted today to offer services and lay infrastructure under only one licence. Under the Convergence Bill, he would be required to obtain four different licences. This pushes us back into the licence raj. Further, there is an overlap of jurisdiction between various authorities. The provision for adjudication is inconsistent with other provisions in the bill. There is no requirement for the post of adjudicating officers, who have been vested with powers, some of which are not even subject to appeal.

The major issue is that of the government reserving residual powers for itself. This leaves tremendous scope for it to interfere in the functioning of the CCI and thus undermines its independence and operational freedom. Every third provision in the bills provides for some residual powers to be vested with the government to exempt a person from payment of licence fee or from satisfying eligibility criteria, etc.

What changes do we need to make in the bill?

Mohit Saraf
There are a few deficiencies in the draft and some changes are advisable. In clause 2(16), the definition of “network service” does not include any provision regarding interconnectivity. Interconnectivity is an important aspect of network service. Terms such as “interconnection”, “interconnection provider”, “interconnection seeker” should introduced and defined.

In clause 2(20), the definition of “programme” should not restricted to TV or radio programmes alone, but should be extended to internet programmes as well as other future delivery mechanisms.

The bill is not very specific when it comes to regulation of tariffs. The CCI should formulate detailed rules of business by which it will arrive at tariffs for endcustomers and interconnection charges. It should have the power to fix interconnection charges and terms. The TRAI Act repealed, the appropriate clauses should be included in the latter.

A licensing mindset is bound to kill telecom and the government’s argument that no licensing is intended, will not wash. Consider section 32, which requires that broadcasting of any event of national or international importance is possible only if the event is also carried by the public service broadcaster. It is not specified under which circumstances broadcasting rights may be granted and events of national and international importance are not defined. Another clause that needs a relook is the residuary powers vested in the centre to exempt any person or corporate entity from requiring a licence. This seems incongruous with the licensing powers of the CCI.

Ravinder Singhania
The bill, despite its title, is merely a second-generation legislation that attempts to clean up the mess that is Indian telecom regulation. The main claim to this legislation is its supposed technological neutrality. Rather, it is a skeletal statute leaving substantive issues to politically susceptible executive rule-making. Prior to enactment of the bill, the government should take note of issues like self-regulation, transparency and consultation.

The bill requires a relook in terms of separating the regulatory and adjudicatory functions assigned to the CCI. Also, the idea that the members and chairpersons of the CCI would be appointed by the centre should be changed. It should also be ensured that members of the CCI and the Communications Appellate Tribunal are selected through a transparent process.

Another clause that needs a relook is the residuary powers vested in the centre to exempt any person or corporate entity from requiring a licence. This seems incongruous with the licensing powers vested with the CCI. The CCI has also been empowered to license the possession of wireless equipment. The definition of wireless equipment in the bill is so wide that, if adopted, a large number of electronic equipment of daily use would require compulsory licensing and registration.

Ramji Srinivasan
We need to make the bill simpler in its content and implementation and clear in its objectives and application. Even if the bill were to act as an enabler, simultaneously, detailed regulations must be issued.

There has been criticism that some aspects of the bill are restrictive, if not draconian. Do you agree?

Mohit Saraf
The principal objection is that the bill is an indirect censorship of the private sector broadcast media and infringes on the “freedom of speech”. It is to be accepted that all legislations represent some curbs on the freedom of some members of society.

Private TV has shown in the past that it is politically as partisan as the government media. Some channels are obscene. Hence, a visually powerful media such as TV broadcasting, and more so the internet, cannot escape regulation. New rules will always be considered draconian by those affected by them. What is relevant however is that the regulation is fair, reasonable and safeguarded against possible misuse.

Ravinder Singhania
Some aspects seem to be restrictive and authorization. The fact that service providers have to ensure that the content is not obscene and the service is not abused seems an unfair burden. The commission may specify eligibility conditions for issue of licence and cross-media restrictions with regard to accumulation of interest. It may also impose restrictions on the number of licences. Such moves could prove harmful to the high-octane IT industry and would bring memories of red-tape and the licence fee fiasco associated with the licensing regime. Not only would licensing discourage Indian IT companies from expanding but may put off MNCs. If Indian companies are forced to obtain a licence to transact electronically or to provide net content services, they would rather host their services abroad where no such permits are required.

Ramji Srinivasan
The bill has several forward-looking provisions but some appear to be unduly restrictive. There ought to be provisions stipulating the minimum licensing requirements and emphasizing self-regulation rather than imposed regulation. Ultimately, it should be the endeavour of every regulator to ensure that he is able to guide the industry with the lightest hand to a competitive free market environment with his role diminishing substantially, if not altogether. However, the bill as it stands requires even a building owner who lets out his rooftop to mount a cellular antenna, to obtain a licence, apart from the operator who is in any case expected to obtain several licences.

Would the replacement of TRAI and TDSAT cause disruptions in the telecom sector?

Mohit Saraf
The Convergence Bill tries to soften any kind of disruption. According to Section 70(d) of the draft, all proceedings pending before TRAI would be deemed to be pending before the commission. Further, in order to provide continuity, sections 70 and 71 of the bill provide for the automatic reappointment of current TRAI and TDSAT officials to the CCI and is appellate tribunal. However, earlier drafts had said that the chairperson and full-time members should be eminent personalities with more than 15 years’ experience in broadcasting, telecom, IT, law, management and finance. This might bring fresh air into the entire structure. Since the functions and responsibilities of TRAI and TDSAT are to be taken care of by the CCI and its appellate tribunal, I cannot see any major disruptions in the sector, even in case of officer replacements.

Ravinder Singhania
The CCI has been assigned both regulatory and adjudicatory functions. This is against the basic principle of natural justice. The principles of separation of powers demand that the two functions be effectively separated. In the existing set up, while TRAI has the responsibility of regulating the sector, the duty of adjudicating lies with the autonomous TDSAT.

Ramji Srinivasan
It should be the endeavour of the licensor that minimum disruption is caused in the transaction to a new regime under the bill. The regulator has a large number of trained officers, whose expertise and experience can be usefully applied in the new avatar. It must be ensured that the regulator develops an independent cadre of officers and must not depend on deputations. In this connection, it would be interesting to examine the role that would be played by DoT once it gives up its licensing powers.

Are there any other comments that you would like to make on the bill?

Mohit Saraf
India would benefit greatly if the bill is passed soon, especially in view of what happened to the broadcasting bill. After being drafted in 1997, it was referred to parliamentary committees. The government received their recommendations only in 1999, and found that most of the provisions had become technologically obsolete. We should also heed the warnings given to the European Commission. “Regulatory uncertainty will force our members to invest outside the European Union, rather than wait for rules to be clarified”.

Ravinder Singhania
The real issue that needs to be looked into is not how technological convergence should be regulated but rather how the nature of regulation itself has to change in light of the convergence of technologies. The impact of the bill on future regulation may turn out to be much greater than the influence of the present regulatory system on the Convergence Bill. The bill in its present form should not be rushed into. Technology-related reforms should not be pushed through without taking into account ground realities. In a world that is steadily moving towards a deregulated information society, the bill stands in deep contrast with the shadow of the central government bearing down on the commission at every juncture. Speedy privatization of state operators is necessary if the new statute is to trigger rapid development of an information society. There should be total freedom to private operators to interconnect freely so that the national network gets a further boost.

Ramji Srinivasan
There is an urgent need to have a debate on the bill. Merely inviting suggestions from the industry is not sufficient. There has to be a dialogue, which can happen only when the industry is able to explain its point of view, and the government exhibits keenness to fairly and dispassionately consider these suggestions. After all, it is this industry which has been invited to participate and fund the majority of resources required for the development of their sector and it is only fair that it knows how it is to be regulated. Needless to add, any law is only as good as it is implemented. The statement of the new communications minister that he is willing to re-examine the provisions of this bill is a welcome statement.