The Technology, Media and Telecommunications Review: India

Overview

There was significant growth and development in carriage of telecom services and provision of content in the Indian market in 2020. The year saw a rise in over-the-top (OTT) service providers and a phenomenal increase in the consumption of data. E-commerce, payment apps, cryptocurrencies and mobile banking (fintech) saw a significant increase in usage and investment. The government of India, along with other regulatory authorities and the Supreme Court of India, clarified and settled several legal and regulatory issues.

The twin challenges of the covid-19 pandemic and a dispute with one of its neighbouring countries saw a change in vision and policy of the government. 'Atma Nirbhar Bharat' (Self-Reliant India) became the focal point for all activities, policies and initiatives. The Prime Minister of India, Narendra Modi, on completion of 25 years of Indian mobile telephony, said in a message that, 'Now that our digital connectivity ecosystem has scaled many peaks, it is time to focus on self-reliance and security.'2

This statement is reflected in recent policy changes covering the TMT sector. In addition to changing its foreign direct investment (FDI) policy3 to increase regulatory oversight of investments made by countries that are situated along the land border with India, in the interest of national security the government has also banned certain mobile apps that are believed to be prejudicial to the sovereignty, integrity and defence of India, and the security of state and public order. The Ministry of Information Technology in view of the emergent nature of threats blocked 59 apps4 on 29 June 2020 and 118 apps on 2 September 2020.5 The list of banned apps encompasses well-known apps such as TikTok, ShareIT, Shein and PubG. On 23 July 2020, the government amended the General Financial Rules 2017 to enable imposition of restrictions on bidders from countries sharing a land border with India on the defence grounds. The amended provision of the General Financial Rules 2017 will apply to all new tenders and public procurements. However, it would not apply to procurement by the private sector.6 This is also likely to impact the upcoming 5G tender.

It appears that India will also witness an increase in investment for manufacturing for technology and telecom-related products. Emergence, implementation and adoption of 5G services will act as catalysts for investment and innovation in TMT and effectively cementing 'convergence' as a way of life.

In early 2019, the Telecom Regulatory Authority of India (TRAI) issued a White Paper on Enabling 5G in India (the 5G White Paper). The 5G White Paper inter alia includes an understanding of 5G technology and its specifications and architecture, and investment strategies for deployment of 5G networks.7

India is a country with a diverse population of 1.3 billion. This includes a significantly large segment of middle-class consumers, with ever-changing and evolving consumption patterns. This is the key for investment and return on investment for any company especially companies in the business of the 'internet of things' (IoT) and the 'industrial internet of things' (IIoT). Many of the corporations in the consumer goods segment including e-commerce/ marketplace operation, thrive on this data to understand the trends and future consumption patterns and the targeted marketing. The government, in recent times, has become more aware about collection, usage and export of this data from India to other countries. This has led to several consultations between government ministries and stakeholders, including with companies on protecting (retaining, storing and usage of) the data – considered to be sovereign. Several draft policies have been issued by the government, which deal with the personal data, identity, data protection and localisation issues.

In a significant development, the Government of India has issued notification to bring OTT, online media streaming services and applications under the ambit of the Ministry of Information and Broadcasting. Several concerns were raised with respect to regulation of delivery of content over the internet. At this stage, the government has taken a view that all such OTT media streaming applications are governed under the Information Technology Act 2000. The present pandemic has paved the way for delivery of content over internet and the consumers have quickly adapted to this change. The Indian film industry (known a Bollywood), has shifted the release of several of its movies from a traditional theatre-based model to an OTT app-based model. Indian OTT media streaming apps are now effectively competing to acquire the latest content as well the market share.

The technology sector witnessed wider adoption of internet services. Online shopping and deliveries saw a rise when compared to traditional bricks-and-mortar shopping. Recent trends indicates that covid-19 has changed the concept of 'online shopping' from a nice-to-have to a must-have. Further, the possibility of cash carrying the virus has encouraged the usage of digital and contactless payments. The necessity of social distancing during covid-19 was realised and followed worldwide, by allowing employees to work from a remote location. Working remotely is enabled by using technologies such as virtual private networks (VPNs), virtual meetings, voice-over-internet protocols (VoIPs), cloud technology and other work collaboration tools. Video conferencing has become the 'new normal' for meetings, conferences and even court hearings. Applications like Zoom and Google Hangouts saw a rise in their user bases. The increase in demand for online services has also increased the demand for spectrum, leading the Cellular Operators Association of India to seek more spectrum from the Indian government.8 Apart from these trends, distance learning via virtual classes, tele-medicine and tele-health have become part of everyday life. Additionally, the Aarogya Setu app introduced by the government played an imperative role in fighting and curbing covid-19 cases in India and may be seen as significant technological advancement.

In line with PM Modi's objective of 'more governance. Less government', the Department of Telecommunications has made amendments to the Other Service Provider Policy, which will immensely benefit the outsourcing and IT industry. The registration of certain activities under the 'other service provider' category has been completely abolished and several restrictions on the IT and outsourcing industry have been relaxed.

Regulation

i The regulators

The TRAI is the regulatory body set up for regulating the telecom and broadcasting sectors under the Telecom Regulatory Authority of India Act 1997, as amended (the TRAI Act). The TRAI aims to create and nurture conditions that facilitate growth of telecommunications in India.

The TRAI is empowered to regulate the terms and conditions for licences and entry of new telecom service providers (TSPs). From time to time, the TRAI issues guidelines and directions that regulate tariffs, interconnection, setting quality of service standards as well as governance of the Authority. The TRAI aims to ensure a fair and transparent policy environment that promotes fair competition.

The main functions of the TRAI include making recommendations on matters such as:

  1. introduction of new service provider;
  2. terms and conditions of licence to a service provider;
  3. revocation of licence;
  4. measures to facilitate competition and promote efficiency;
  5. technological improvements;
  6. type of equipment to be used by the service providers;
  7. measures for the development of telecommunication technology; and
  8. efficient management of available spectrum.

The TRAI also levies fees and other charges as may be determined by regulations and may perform other functions including such as administrative and financial functions as may be entrusted to it by the central government.9

ii Main sources of law

Telecommunications and broadcasting sectors are governed by various laws, policies, rules and regulations, legal framework is broadly provided by:

  1. The Telegraph Act 188510 – governing the use of wired and wireless telegraphy, telephones, teletype, radio communications and digital data communications. Under the Act, the government has exclusive jurisdiction to establish, maintain, operate, license and oversight all forms of wired and wireless communications within India.11
  2. The Wireless Telegraphy Act 193312 – regulating the possession of wireless telegraphy apparatus.
  3. The Prasar Bharti (Broadcasting Corporation of India) Act 199013 – providing for the establishment of a Broadcasting Corporation for India, to be known as Prasar Bharati, to define its composition, functions and powers and to provide for matters connected therewith or incidental thereto.
  4. The Cable TV Networks (Regulation) Act 199514 – regulating the operation of cable television networks in the country and matters connected therewith or incidental thereto.
  5. The TRAI Act15 – establishing the TRAI and the TDSAT to regulate the telecommunication services, adjudicate disputes, dispose of appeals and to protect the interests of service providers and consumers of the telecom sector, to promote and ensure orderly growth of the telecom sector and for matters connected therewith or incidental thereto.
  6. National Digital Communications Policy 2018 (NDCP – 2018)16 replaced National Telecom Policy – 2012 with the aim of providing digital empowerment and improved well-being of the people of India. The main mission of the NDCP – 2018 is to (1) connect India by creating robust digital communications infrastructure; (2) propel India by enabling next generation technologies and services through investments, innovation and IPR generation and (3) secure India by ensuring sovereignty, safety and security of digital communications.
  7. Broadband Policy 200417 – recognising the potential of ubiquitous broadband service in the growth of GDP and enhancement in quality of life through societal applications including tele-education, tele-medicine, e-governance, entertainment, as well as employment generation by way of high-speed access to information and web-based communication, the government has finalised a policy to accelerate the growth of broadband services.
  8. The Information Technology Act 200018 (the IT Act) as amended by the Information Technology (Amendment) Act 2008 (along with the Rules thereunder) – aims to provide legal recognition for transactions carried out by means of electronic data interchange and other means of electronic communication.
  9. Policy guidelines for uplinking and downlinking of television channels19 – the government had issued uplinking and downlinking policy guidelines 2011 for private satellite TV channels and teleports. Recently, in order to address the fast-evolving broadcasting technology, among other things, the government introduced a new draft policy in April 2020 and sought comments from various stakeholders. At the request of stakeholders, the government extended the time period for submitting comments until 7 June 2020;20 however, the new policy is still awaited.
  10. Policy guidelines for the provision of internet protocol television (IPTV) services21 – providing clarity on regulatory provisions, licensing requirements and other issues for platforms capable of providing IPTV services.

iii Regulated activities

One of the objectives of the National Telecom policy – 2012 was to 'strive to create one nation – one licence' across services and service areas. Keeping in mind the interest of consumers and growth of the telecom sector, the TRAI recommended that the country should migrate to a 'unified licensing' regime for all telecom services.22 Accordingly, after taking into account the recommendations of the TRAI for unified licences (UL), the government has decided to grant a UL. Authorisation under a UL comprises the following services:

  1. UL (all services);
  2. access service (service area-wise);
  3. internet service (category A with all-India jurisdiction);
  4. internet service (category B with jurisdiction in a service area);
  5. internet service (category C with jurisdiction in a secondary switching area);
  6. national long distance (NLD) service;
  7. international long distance (ILD) service;
  8. global mobile personal communication by satellite (GMPCS) service;
  9. Public mobile radio trunking service (PMRTS) service;
  10. very small aperture terminal (VSAT) closed user group (CUG) service;
  11. INSAT MSS-reporting (MSS-R) service; and
  12. resale of international private leased circuit (IPLC) service.23

Guidelines for granting a UL dated 19 August 201324 – apart from the entry fee and licence fee – provide the broad guidelines for granting a UL whereby the applicant must be an Indian company and meet eligibility conditions and the grant would be subject to fulfilment of all requisites under the application (provided in Annexure II of the guidelines). The UL is issued by the Department of Telecommunications (DoT), on a non-exclusive basis, for a period of 20 years. The UL may be renewed for a period of 10 years upon request of the licensee.

iv Ownership and market access restrictions

An application for a UL can only be made by a company incorporated in India. For the purpose of a UL, an applicant is required to pay the prescribed one-time entry fee, licence fee, bank guarantees and must meet the terms and conditions fixed by the DoT. The applicant can apply for authorisation for more than one service and service area subject to fulfillment of all the conditions of entry simultaneously or separately at different times.25 Additionally, an applicant may also be required to meet the conditions prescribed under the local laws applicable to the concerned sector.

Further, the applicant is also required to comply with the FDI caps prescribed by the government. In 2013, the government allowed 100 per cent FDI in the telecommunications sector wherein up to 49 per cent is allowed through the automatic route and above 49 per cent through the government route.26 Prior to this, India only allowed 74 per cent FDI in telecommunications. The Union Minister of Communications has shown his desire for additional FDI in the telecommunications sector. In his view, India needs a blend of 'data availability, data utility, data innovation, and data privacy' as this will showcase India as a 'good country' for digital commerce and this, in turn, will attract more FDI.27

v Transfers of control and assignments

In 2014, the DoT issued guidelines for transfers and mergers of various categories of telecommunication service licences and authorisations under the UL on compromises, arrangements and amalgamation of the companies.28 The guidelines required the licensor to be notified of any proposal of compromise, arrangements and amalgamation of companies and a time period of one year was allowed for the transfer or merger of various licences in different service areas. In 2018, the DoT amended the guidelines issued in 2014 regulating mergers and acquisitions of telecom services whereby spectrum that was beyond the prescribed limits was allowed to be traded in addition to being surrendered.29

Further, mergers and acquisitions (M&A) or amalgamation of companies is subject to a spectrum cap of 50 per cent in a band for access services. Any M&A will be allowed only where the market share for access services in the respective service area of the resultant entity is up to 50 per cent. Where the market share of the resultant entity is in excess of 50 per cent, such entity will be required to reduce its market share to the limit of 50 per cent within the specified period of one year. Similarly, the resultant entity will only be allowed to hold up to 25 per cent of total spectrum assigned for access services.

Under the Competition Act 2002 (the Competition Act), the Competition Commission of India (CCI) has the mandate to regulate M&A, provided the companies involved in the M&A meet the asset and turnover thresholds. There had been an ongoing conflict on jurisdiction between the CCI and the TRAI. The Supreme Court of India, while dealing with the jurisdictional dispute, clarified that where a sectoral regulator exists, it is the competent authority to decide the jurisdictional fact at the first instance. Thereafter, the CCI can be activated to investigate the matter going by the criteria laid down in the relevant provisions of the Competition Act. Thus, the CCI's jurisdiction is not ousted and only CCI is empowered to deal with the anticompetitive act from the lens of the Competition Act.30

The direct-to-home (DTH) guidelines inter alia provide the eligibility criteria whereby broadcasting companies or cable network companies shall not be eligible to collectively own more than 20 per cent of the total equity of the applicant company at any time during the license period. Similarly, the applicant company not to have more than a 20 per cent equity share in a broadcasting or cable network company.31

The UL also provides for restrictions on transfer of licence, whereby the licensee cannot, without the prior written consent of the DoT, assign or transfer this licence in any manner whatsoever to a third party.

Telecommunications & internet access

i Internet and internet protocol regulation

Guidelines for granting a UL dated 19 August 201332 provide that (1) internet service (category A with all-India jurisdiction); (2) internet service (category B with jurisdiction in a service area) and (3) internet service (category C with jurisdiction in a secondary switching area) are included in the UL. Accordingly, with effect from 19 August 2013, UL with ISP authorisation is granted for the provision of internet services.

Further, in terms of guidelines for granting a UL (virtual network operators (VNO)) dated 31 May 2016, internet services are included in the UL.33 Thus, with effect from 31 May 2016, UL (VNO) with ISP authorisation is granted for the provision of internet services.

In 2019, (as on 31 December 2019), there were 151 authorised licences for ISPs, which include 45 category A licences, 82 category B licences and 24 category C licences. Further, 1,600 ULs were issued with ISP authorisation for various categories including 55 category A ISP authorisation, 547 Category B ISP authorisation, 998 Category C ISP authorisation. Whereas ULs (VNO) with ISP authorisation were issued for categories including 25 category A ISP authorisation, 211 category B ISP authorisation and 33 category C ISP authorisation.34

ii Universal service

The Indian Telegraph (Amendment) Act 2003, established the Universal Service Obligation (USO) Fund35 with the aim of providing access to telegraph services to people in rural and remote areas at affordable and reasonable prices. Universal service levy (USL) is collected from the service provider at a defined percentage of adjusted gross revenue. USL is credited to the consolidated fund of India and allocation of funds to the USO Fund is through parliamentary approval.36

As discussed above, NDCP – 2018 is one of the main sources of law in India. The DoT introduced NDCP – 2018 to meet the information and communication needs of citizens and enterprises through the establishment of secure, accessible and affordable digital communications infrastructure and services.37 Under the NDCP – 2018, the National Broadband Mission – Rashtriya Broadband Abhiyan is established to secure universal broadband access. Further, the USO Fund and public-private partnerships will be used for the implementation of the following broadband initiatives:

  1. BharatNet – providing 1Gbps to Gram Panchayats upgradeable to 10Gbps;
  2. GramNet – connecting all key rural development institutions with 10Mbps upgradeable to 100Mbps;
  3. NagarNet – establishing 1 million public wi-fi hotspots in urban areas; and
  4. JanWiFi – establishing 2 million wi-fi hotspots in rural areas.

iii Restrictions on the provision of service

The TRAI is empowered to monitor and regulate charges such as interconnection usage charges and termination charges. For the purpose of regulation of charges and terms of service, TRAI has the power to issue directions and notifications.

The TRAI issued the Telecommunication Tariff Order 199938 (TTO) on 9 March 1999. Amendments to the TTO 199939 have been made to reflect the evolving telecommunication landscape in the context of the telecom tariff offered in India and abroad by telecom service providers licensed by DoT. In addition to the TTO, various regulations, directions and advisories have been issued by the TRAI for the purpose of regulatory requirements.

At present, mobile tariffs are under forbearance, which means operators have a free hand in fixing rates; they only have to report tariff plans to TRAI within seven days of the launch.40 The TRAI had released a consultation paper41 raising questions relating to requirement of regulatory intervention in tariff fixation, fixing a floor price for voice and data services on telecom networks and seeking detailed response on how to compute the floor price, a need to fix floor price despite the fact that the TSPs have increased their tariff. The telecom service providers had been asking the Indian government to set a floor for tariffs urgently to restore the health of the sector, which has been severely impacted by the adjusted gross revenue (AGR) payments issue.

The TRAI had issued the Telecom Commercial Communications Customer Preference Regulations 201842 (Customer Preference Regulations) in order to curb the problem of unsolicited phone calls and text messages. The Customer Preference Regulations require registration of the senders, registration of the headers (i.e., unique IDs assigned to telemarketers) and provide complete control to the subscriber to provide its consent (and revoke it if already granted) to receive unsolicited phones calls and messages. However, from the industry's perspective, the Customer Preference Regulations are complex, costly and unlikely to resolve the problem.43

iv Privacy and data security

In a landmark judgment44 on the issue of privacy and data protection, the Supreme Court of India observed that privacy is a constitutional right stemming from Article 21 of the Constitution of India. Following the Supreme Court judgment, a draft Personal Data Protection Bill 2018 (the 2018 Bill) followed by the Privacy Data Protection (Amendment) Bill 2019 (the PDP Bill 2019) were introduced that brought about some key changes in the regime. The 2018 Bill and the PDP Bill 2019 are largely based on the principles of the EU General Data Protection Regulation (GDPR), with certain modifications. A few common principles in the GDPR and PDP Bill are: data minimisation, limited grounds of processing, data quality and security, and privacy by design.

Presently, in the absence of a specific legislation on data protection, issues with regard to data protection and privacy are governed by the Information Technology Act 2000 (the IT Act) and relevant rules framed under the IT Act that include:

  1. The Information Technology (Reasonable Security Practices and Procedures and Sensitive Personal Data or Information) Rules 201145 (the SPD Rules). These rules regard sensitive personal data or information and are applicable to the body corporate or any person located within India.
  2. The Information Technology (Information Security Practices and Procedures for Protected System) Rules 201846 (the Protected System Rules). These rules provide details of infrastructure requirements to be implemented by organisations that have protected systems for highly sensitive data or data collection centres; and
  3. The Information Technology (Intermediaries Guidelines) Rules, 201147 (the Intermediaries Guidelines). These Rules provide a due diligence framework to be observed by an intermediary while discharging its duties.

For growing cybersecurity concerns there are laws that aim at addressing cyber-attacks such as Indian Penal Code 1860 (IPC), which provide for punishments for offences like defamation, cheating, criminal intimation and obscenity committed in cyberspace.

Further, in accordance with the Information Technology (The Indian Computer Emergency Response Team and Manner of Performing Functions and Duties) Rules 201348 (the CERT Rules), the Computer Emergency Response Team (CERT-In) has been established as the nodal agency responsible for the collection, analysis and dissemination of information on cyber incidents and taking emergency measures to contain such incidents.

Due to the covid-19 pandemic, there is an increased dependence on technology. Cybersecurity is a core technology to keep companies secure as they go online and virtual. India is alert, cautious and is taking decisions to counter cyberthreats and constantly developing new systems. Prime Minister Modi, during his speech on the 74th Independence Day, highlighted the risks and threats in cyberspace that threaten the development of the country. As a measure to combat cybersecurity risks, it was assured that a draft of new cybersecurity policy would be introduced.

Spectrum policy

i Development

Spectrum is regulated by number of bodies in India. Spectrum licensing and allocation is regulated by Wireless Planning and Coordination Wing of DoT under the Ministry for Communications and Information Technology. The Standing Advisory Committee on Radio Frequency Allocation is the decision-making authority for spectrum frequency allocation. The DoT is the licence-issuing authority, which primarily relies upon the recommendations made by the TRAI. The TRAI actively makes recommendations on aspects related to spectrum management including but not limited to the allocation and pricing of spectrum. Laws governing spectrum management include the Indian Telegraph Act 1885, the Indian Wireless Telegraphy Act 1933, the Telegraph Wires (Unlawful Possession) Act 1950 and the Cable Television Networks (Regulation) Act 1995.49

Initially, spectrum assignment was done by bundling a spectrum band with the franchise licence for a service (for instance, GSM 900). Additional assignment of spectrums, if any, was at the discretion of the DoT. The TRAI's recommendations suggested that all spectrum is required to be auctioned. The first spectrum licence was held in 1994. The government had then divided the entire territory of India into 23 telecom circles (Chennai and Tamil Nadu were merged in 2007).The bidders had to satisfy prerequisites such as financial resources, reliability and investment in research set by the DoT. In 2007, the DoT had assigned spectrum on a 'first-com-first-served' basis for 2G services. That year, 2G spectrum assignment was challenged before the Supreme Court in India50 (the 2G Spectrum Auction case) on the ground that action taken by the DoT to grant UAS licences and allocate spectrum in the 2G band was arbitrary and unconstitutional and had been done at the expense of the taxpayer.

Accordingly, following the decision in the 2G Spectrum Auction case, spectrum allocation regulation in India switched from command and control to more market-oriented methods. Currently, spectrums are auctioned in formats such as 'first price sealed bid auction', 'second price sealed bid auction', 'Dutch auction, 'English or Japanese auction'.

Further, in the wake of recent trends, the DoT, via its Guidelines on Trading of Access Spectrum by Access Service Providers,51 permitted spectrum trading allowing licence operators to trade their exclusively assigned spectrum usage rights to unlicensed parties in order to efficiently use the spectrum.

Pursuant to the AGR case, the DoT filed an affidavit with the Supreme Court stating that AGR dues have to be calculated based on spectrum sharing52 and spectrum trading agreements signed between the two telecom service providers. This brought the spectrum trading pact between RComm and Reliance Jio under the DoT's scrutiny.53 The DoT reported to the Supreme Court in its affidavit that there is spectrum trading between Reliance Communications Limited (seller) and Reliance Jio Infocomm Limited, Aircel Limited/Dishnet Wireless Limited (seller) and Bharti Airtel Limited (buyer), Videocon Telecommunications Limited (seller) and Bharti Airtel Limited (buyer), and TIKONA Digital Networks Ltd (seller) and Bharti Hexacom (buyer). If the Supreme Court directs that spectrum trading is also subject to AGR dues, both Airtel and Reliance are likely to take a hit.

Further, the TRAI had issued a consultation paper on the methodology of applying spectrum usage charges under the weighted average method of spectrum usage charges assessment, in cases of spectrum sharing dated 17 August 2020.54 The preliminary objective of spectrum sharing is to enhance spectral efficiency by combining the spectrum holding of two licensees. Accordingly, the consultation paper is expected to bring more clarity on aspects of spectrum sharing.

Developments in 2019–20 have been both boon and bane for spectrum management. On one hand, spectrum usage has skyrocketed as a result of digitisation and the internet, on the other, the AGR case shook the financial position of telecom operators (telcos), which was also evident from the delay in auctioning 5G spectrum.

ii Flexible spectrum use

Apart from the traditional use of spectrum, the Ministry of Railways had recently proposed to instal an ultra-high-speed LTE-based communication corridor along the rail network for train–ground and train–train communication and had sought the DoT's suggestions on the same. Accordingly, the TRAI at the request of the DoT issued a consultation paper dated 24 June 2019 on the allotment of spectrum to Indian railways for public safety and security services. This consultation paper addresses issues such as which band of spectrum and how much spectrum should be assigned to Indian Railways.

iii Broadband and next-generation services spectrum use

Further, digitisation and the covid-19 pandemic have increased the demand for online services and, as a result, increased the demand for spectrum, leading the Cellular Operators Association of India to seek more spectrum from the government.55 Spectrum sharing and spectrum trading are also a way to deal with the increasing spectrum demand. The development in 5G spectrum auction also looks uncertain, given the financial burden following the AGR case.

iv Spectrum auctions and fees

Broadly, there are three types of licence fees levied by the DoT: (1) an initial licence fee, which generally is non-refundable, (2) an annual licence fee, and (3) an additional fee for the allocation of spectrum.56 During a spectrum auction, the DoT generally sets a reserve price, which is the minimum price at which the spectrum can be licensed.57

Media

i Regulation of media distribution generally

India has a large broadcasting and distribution industry, comprising approximately 900 satellite TV channels, 6,000 multi-system operators, around 60,000 local cable operators, seven DTH operators and a few IPTV service providers.58 The content providers are required to follow guidelines and directions issued by the Ministry of Information and Broadcasting (MIB), whereas the distribution of content through satellite television is governed by the Cable TV (Regulation) Act 1995. The MIB has also issued guidelines for provision of internet-protocol television (IPTV) services. These guidelines enable distribution of TV channels using managed IP networks.

Further, the Cinematograph Act 195259 provide certification of cinematograph films for exhibition and regulates cinema and its content. In order to tackle film piracy, in February 2019 an amendment60 was made to the Cinematograph Act 1952 by instituting penal provisions for unauthorised recording and duplication of films by making it a legal offence and punishing the offender with a three-year jail term and a fine of 100,000 rupees.

The MIB aims to prevent state governments or their entities, as well as religious and political parties, from entering the TV distribution space. Accordingly, in February 2020, the MIB had introduced a draft on the Cable Television Networks (Regulation) Amendment Bill, 2020 to invite comments from all stakeholders and individuals. State governments will neither be granted registration nor will their registration be renewed. This proposed amendment seems to be in line with the recommendation of the TRAI in 2012 that state governments, political and religious bodies be prevented from entering into the business of broadcasting or distribution of TV channels.61

Further, in line with the Digital India Campaign that aims to transform India into a digitally empowered society and knowledge economy, the government has permitted FDI of 26 per cent for uploading or streaming of news ajd current affairs through digital media. However, the government recently proposed the 26 per cent FDI limit should be applicable to the aggregators as well as print media, which was not welcomed by the industry.62 If a cap is put on FDI investment by aggregators, it may have a direct impact on players that have raised investments from foreign investors.

The covid-19 pandemic has overturned all assumptions of business-as-usual for India. To tackle the crisis, the government must support traditional media and entertainment businesses for digital transformation. However, the pre-covid-19 trend demonstrates that most traditional domestic players had already begun to transform, including investments in digital platforms by TV, print and radio industry. Another reason for transformation is the greater competition that traditional players may face since telecommunications providers have also moved into the OTT business63 through the provision of syndicated content offerings on the likes of Jio Apps and Airtel Wynk.

In addition, 15 of the OTT media streaming apps or online curated content (OCC)providers operating in India have recently adopted a Code for Self-Regulation of OCC Providers (the OCC Provider Code). The OCC Provider Code states that the each of the OCC providers shall have a grievance cell and shall comply with applicable laws of India. Most, importantly, the OCC Provider Code lays an emphasis on upholding freedom as envisaged under Article 19(1)(a) and 19(1)(g) of the Constitution of India. Article 19(1)(a) provides for 'freedom of speech and expression' and Article 19(1)(g) guarantees right to 'practise any profession, or to carry on any occupation, trade or business'. It will be interesting to see the legal and regulatory developments in light of the OCC Provider Code and various debates on regulation of content over internet through a regulatory mechanism.

ii Internet-delivered video content

In a recent development, the government of India issued a notification brining online media content within the ambit of the Ministry of Information and Broadcasting (MIB). Accordingly, the various policies of the MIB on content will now be applicable to online video content. This is a significant shift from the earlier stand taken by the government. Earlier in 2019, the players operating in OTT and video-on-demand services adopted a self-regulatory Code of Best Practices. Meanwhile, the TRAI, realising the need to regulate OTTs, released a consultation paper on the Regulatory Framework for Over-The-Top Communication Services (the Consultation Paper on OTT) on 12 November 2018. The objective of the Consultation Paper on OTT was to analyse and discuss the implications for the growth of OTT services and their relationship with telecom service providers. The Consultation Paper on OTT also invited comments from stakeholders to bring about the change in the current regulatory framework and the manner in which such changes should be effected. Additionally, the Consultation Paper sought recommendations for a regulatory or licensing regime for OTT service providers. However, in a press release issued by the TRAI on 14 September 2020, it ruled out the possibility of regulating OTTs and stated that 'market forces may be allowed to respond to the situation without prescribing any regulatory intervention. However, developments shall be monitored and intervention as felt necessary shall be done at appropriate time.'64

The year in review

The TMT industry continued to grow under the convergence trends during the past year. The industry witnessed changes, not only in terms of regulatory and legislative measures by the government, but also key judgments by the Supreme Court.

The PDP Bill is a much-awaited piece of legislation that once passed by Parliament will become the primary statute governing privacy and data protection laws in India. In parallel, the Department for Promotion of Industry and Internal Trade (DPIIT) is in the process of finalising the new draft e-commerce policy that restricts information that can be stored, used, transferred, processed and analysed by e-commerce companies.65 The draft policy also empowers the government to investigate and take appropriate action against any e-commerce activity that threatens national security. Recently, the government banned certain applications (with Chinese investment, such as Tik Tok, WeChat, Shein etc.), holding that they are prejudicial to the country's integrity and national security. The PDP Bill will codify the privacy laws and provide the required transparency to technology companies looking forward to investing in India. Further, it is also reported that government bodies are planning to introduce a bill in Parliament to ban trade in cryptocurrencies. This report comes after the Supreme Court lifted the curb on cryptocurrency imposed by the Reserve Bank of India,66 which restricted banks and financial institutions from providing access to the banking services to those engaged in transactions in crypto assets.67

The TRAI has also undertaken consultation process in various fields, which include, cloud services,68 platform services offered by DTH operators69 and tariff-related issues for broadcasting and cable services.70 Further, a government body has recommended that separate legislation be formulated to govern non-personal data, and a new regulatory body be put in place.71 However, the potential impact of the consultations and recommendations is yet to be seen.

The TMT industry saw intense mergers, acquisitions and consolidations in the past year. Key transactions involve the acquisition by Reliance Jio Digital Services Limited of the artificial intelligence (AI) firm Haptik for the initial business transfer that could compete against Google Assistant and Amazon's Alexa. Within two years, Reliance Industries Limited acquired companies like Balaji Telefilms (TV content), EdCast (learning enabler), Embibe (edtech content), Saavn (music content), Radsys (5G architecture), Eros (TV content), Hathway (broadband), DEN (cable), Reverie (language processing), Fynd (online shopping), Tesseract (AR/VR) and Grab (logistics).72 Further, Tata Teleservices (TTSL) merged its consumer business with that of Bharti Airtel and Bharti Hexacom, whereby TTSL transferred assets and spectrum.

In the media sector,73 Hotstar, owned by the Star network, was rebranded as Disney+Hotstar. It plans to localise Disney+ movies and shows by dubbing or adding subtitles in Indian languages. Bharti Airtel's direct-to-home (DTH) arm Airtel Digital TV and Dish TV merged in August 2019.

Further, the judgment of the Supreme Court in the AGR case can be seen as a setback for telcos for years to come. The Supreme Court subsequently granted telecom companies 10 years to clear AGR dues of around 1.43 billion rupees to the Centre, providing much-needed relief to some telcos that could have faced the prospect of winding up their operations for being unable to pay the entire amount in one go.74

A major source of interest is the auction of 5G spectrum, which has been delayed for some quite sometime now.

Conclusions and outlook

Because of the covid-19 pandemic, the future of the TMT industry depends on its ability to harness emerging technologies. The need of the hour is to reimagine business strategies involving virtual as well as digital mediums to deliver services to consumers. Covid-19 is also going to act as a major factor in delaying the roll out of 5G products and services. At the same time, there is a surge in the products and services offered by TMT companies and TMT is playing a vital role in helping to contain the outbreak. The government launched the C-DOT video conferencing tool, which is a secure videoconferencing platform for use by the government and other strategic sectors. C-DOT contributed to the Covid Savdhan application enabling authorities to reach out to all mobile subscribers in any particular containment zone; the Arogya Setu application to provide updates on whether there has been contact with a covid-19 positive person; and the covid-19 quarantine alert system that collects phone data, including the device's location, on a common secure platform and alerts the local agencies in case of a violation by covid patients under watch or in isolation. These initiatives have played a crucial role in fighting the pandemic.

Further on the technology front, the networks and technologies section of the DoT has undertaken policy initiatives on machine-to-machine (M2M) communications, including the identification of critical M2M/IoT services.75 M2M communication is considered to be a key enabler of applications and services across a broad range of vertical markets (e.g., healthcare, logistics, transport and utilities).76

In addition, with the transformation of the TMT industries in the wake of the covid-19 pandemic, the internet has become a global network serving billions of users worldwide, with broad acceptance of the internet protocol (IP). The current version of the IP being used in India is IPv4, which is more than three decades old and has many limitations. In order to improve upon the addressing capacities of IPv4, among other things, internet protocol version 6 (IPv6) has been developed. IPv6 not only has various enhancements over IPv4 but it also provides an enabling platform for IoT and M2M communications.77

The government's initiatives to strengthen telecommunications infrastructure in various regions of the country also shows its commitment to achieving the vision of Digital India; however, it is important to ensure that the subscribers are not discriminated against by TSPs through the introduction of preferential schemes. The dispute on such schemes is still pending before the telecom authorities and it will be interesting to see how the principle of net neutrality will be considered while dealing with preferential access to the high-end subscribers of the TSPs. The decision of the telecom authorities would pave the way for the future of telecom services in India.

The covid-19 pandemic has not only affected the health of individuals but also businesses and the economy as a whole. Accordingly, the government changed its FDI policy pursuant to a Press Note No. 3 dated 17 April 2020 to increase regulatory oversight on investments from countries along India's land border (i.e., Afghanistan, Bangladesh, Bhutan, China, Myanmar, Nepal and Pakistan). Further, the government is also aware of the security concerns that are inherent in the process of digitisation, and during the stand-off with China the government imposed a ban on certain applications involving Chinese investment.

Undoubtedly, the current trends in the TMT space such as tele-medicine, tele-doctors, drive-in theatres, and developments in virtual monitoring of patients in intensive care units, along with the significant trends highlighted earlier, make it certain that the technologies born of covid-19 are here to stay.

Footnotes

1 Rahul Goel and Anu Monga are partners at Anant Law.

3 Press Note No. 3 dated 17 April 2020.

4 Government Bans 59 mobile apps which are prejudicial to sovereignty and integrity of India, defence of India, security of state and public order, 29 June 2020 , Ministry of Electronics & IT, available at: https://pib.gov.in/PressReleasePage.aspx?PRID=1635206.

5 Government Blocks 118 Mobile Apps Which are Prejudicial to Sovereignty and Integrity of India, Defence of India, Security of State and Public Order, 2 September 2020, Ministry of Electronics & IT, available at: https://pib.gov.in/PressReleasePage.aspx?PRID=1650669.

6 Restrictions on Public Procurement from certain countries, Ministry of Finance, July 23, 2020, available at: https://pib.gov.in/PressReleasePage.aspx?PRID=1640778.

8 Leroy Leo, covid-19 lockdown: COAI urges government to provide telcos additional spectrum, Live Mint, 25 March 2020, available at: https://www.livemint.com/industry/telecom/covid-19-lockdown-coai-urges-government-to-provide-telcos-additional-spectrum-11585124047318.html.

9 Section 11 of the TRAI Act, 1997.

11 History of the Telegraph Act, available at: https://www.legacyias.com/indian-telegraph-act-1885/.

12 The Indian Wireless Telegraphy Act, 1933, available at: https://dot.gov.in/act-rules-content/2419

13 The Prasar Bharati (Broadcasting Corporation of India) Act, 1990, available at: http://legislative.gov.in/sites/default/files/A1990-25.pdf.

14 The Cable Television Networks (Regulation) Act, 1995, available at: http://legislative.gov.in/sites/default/files/A1995-7.pdf.

15 The Telecom Regulatory Authority of India Act, 1997, available at: http://legislative.gov.in/sites/default/files/A1997-24_0.pdf.

16 National Digital Communications Policy – 2018, available at: https://dot.gov.in/sites/default/files/Final%20NDCP-2018_0.pdf.

18 The Information Technology Act, 2000, available at: https://www.indiacode.nic.in/bitstream/123456789/1999/3/A2000-21.pdf.

19 Circular dated 30 April 2020 of Ministry of Information and Broadcasting, available at: https://mib.gov.in/sites/default/files/Draft%20Policy%20Guidelines%20%281%29.pdf.

20 Circular dated 02 June 2020 of Ministry of Information and Broadcasting, available at: https://mib.gov.in/sites/default/files/Circular_1.PDF.

21 Guidelines for provisioning of Internet Protocol Television (IPTV) services, available at: https://mib.gov.in/sites/default/files/ilovepdf_merged_1.pdf.

22 Recommendations on Unified Licensing, available at: https://trai.gov.in/sites/default/files/Recomodifiedfinal.pdf.

24 Guidelines for Access Services Licences, available at: https://dot.gov.in/access-services/guidelines-for-access-services-licences.

25 DoT Guidelines for grant of unified licence, available at: https://dot.gov.in/sites/default/files/2016_03_28%20ULG%20AS-I.pdf.

26 FDI In Telecommunications Sector, available at: https://www.fdi.finance/sectors/telecommunications.

27 India needs additional FDI in the telecom sector: RS Prasad, available at: https://www.medianama.com/2019/09/223-fdi-telecom-sector/.

28 Guidelines for transfer or merger of various categories of telecommunication service licences or authorisation under a UL on compromises, arrangements and amalgamation of the companies, available at: https://dot.gov.in/sites/default/files/DOC200214_0.pdf.

29 Amendment in the guidelines for transfer or merger of various categories of telecommunication service licences or authorisation under a UL on compromises, arrangements and amalgamation of the companies dated 20 February 2014, available at: https://dot.gov.in/sites/default/files/2018_09_26%20AS%20T%26M.pdf?download=1.

30 Competition Commission of India v. Bharti Airtel Limited and Ors., (2019) 2 SCC 521.

31 Guidelines for obtaining license for providing direct-to-home (DTH) broadcasting service in India, available at: https://digitalindiamib.com/Detailsguidlinesupdated6.11.2007.pdf.

32 Guidelines for Access Services Licences, available at: https://dot.gov.in/access-services/guidelines-for-access-services-licences.

33 Guidelines for grant of unified licence (virtual network operator), available at: https://dot.gov.in/sites/default/files/UL%20%28VNO%29%20Guidelines_0.pdf?download=1.

34 Annual Report 2019-20, Department of Telecommunications, Ministry of Communications, government, available at https://dot.gov.in/sites/default/files/Annual%20Report-2019-20%28%20English%29.pdf.

35 Section 9A of the Indian Telegraph Act, 1885, available at https://www.indiacode.nic.in/bitstream/123456789/2307/1/a1885___13.pdf.

36 Section 9B of the Indian Telegraph Act, 1885, available at https://www.indiacode.nic.in/bitstream/123456789/2307/1/a1885___13.pdf.

37 National Digital Communications Policy, 2018, available at https://dot.gov.in/sites/default/files/Final%20NDCP-2018_0.pdf.

38 Telecommunication Tariff Order, 1999, available at: https://trai.gov.in/sites/default/files/Main_Regulations_09_Mar_1999.pdf.

41 Consultation Paper on Tariff Issues of Telecom Services, 17 December 2019, available at: https://trai.gov.in/sites/default/files/CP_17122019.pdf.

42 Telecom Commercial Communications Customer Preference Regulations, 2018, available at: https://trai.gov.in/sites/default/files/RegulationUcc19072018.pdf.

44 Justice K.S. Puttaswamy (retd.) & Anr vs. Union of India and Ors., reported at (2017) 10 SCC 1.

50 Writ Petition (Civil) No. 423/ 2010 and 10/ 2010.

51 Guidelines for trading of access spectrum by access service providers, available at: https://dot.gov.in/sites/default/files/2015_10_13%20Trading-WPC_0.pdf?download=1.

52 Guidelines for sharing of Access Spectrum by Access Service Providers, available at: https://dot.gov.in/sites/default/files/2015_10_13%20Sharing-WPC_1.pdf?download=1.

53 DoT submits details of spectrum sharing, trading of telcos to SC, available at: https://www.livemint.com/news/india/dot-submits-details-of-spectrum-sharing-trading-of-telcos-to-sc-11598251285437.html.

54 Recommendations on Methodology of applying Spectrum Usage Charges (SUC) under the weighted average method of SUC assessment, in cases of Spectrum Sharing, available at: https://www.trai.gov.in/sites/default/files/Recommendation_17082020_0.pdf.

55 Leroy Leo, covid-19 lockdown: COAI urges government to provide telcos additional spectrum, Live Mint, 25 March 2020, available at: https://www.livemint.com/industry/telecom/covid-19-lockdown-coai-urges-government-to-provide-telcos-additional-spectrum-11585124047318.html.

56 Licensing Framework for Telecom: A Historical Overview, available at: https://cis-india.org/telecom/resources/licensing-framework-for-telecom.

60 Union Cabinet approves amendment to Cinematograph Act to tackle film piracy, available at: https://www.livemint.com/industry/media/union-cabinet-approves-amendment-to-cinematograph-act-to-tackle-film-piracy-1549518226819.html.

61 MIB Plans To Block State Governments & Others From Entering Cable Distribution by Amending Cable TV Networks Act, available at: http://www.satiitv.com/amending-cable-tv-networks-act/.

62 I&B Ministry's Amit Khare says 26% FDI limit should apply to news aggregators, available at: https://www.medianama.com/2020/07/223-news-aggregators-amit-khare-fdi/.

63 Over-the-Top Video Services in India: Media Imperialism after Globalization, available at: https://quod.lib.umich.edu/m/mij/15031809.0006.206?view=text;rgn=main.

64 TRAI releases Recommendations on Regulatory Framework for Over-The-Top (OTT) Communication Services, available at: https://www.trai.gov.in/sites/default/files/PR_No.69of2020.pdf.

65 Draft ecommerce policy seeks to set up regulator, restrict data storage, available at:

https://economictimes.indiatimes.com/news/economy/policy/draft-ecomm -policy-seeks -to-set -up-regulator -restrict-data -storage/articleshow/76760134.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst.

66 Internet and Mobile Association of India v. Reserve Bank of India, W.P. (C) No. 528 of 2018, decided on 04 March 2020, available at: https://main.sci.gov.in/supremecourt/2018/19230/19230_2018_4_1501_21151_Judgement_04-Mar-2020.pdf.

68 Consultation Paper on Cloud Services, available at: https://www.trai.gov.in/sites/default/files/CP_23102019.pdf.

69 Consultation Paper on Platform Services offered by DTH Operators, available at: https://www.trai.gov.in/sites/default/files/CP_28082019.pdf.

70 Consultation Paper on Tariff related issues for Broadcasting and Cable services, available at: https://www.trai.gov.in/sites/default/files/CP_Tariff_BnCS_16082019%20%281%29_0.pdf.

71 Report by the Committee of Experts on Non-Personal Data Governance Framework, available at: https://ourgovdotin.files.wordpress.com/2020/07/kris-gopalakrishnan-committee-report-on-non-personal-data-governance-framework.pdf.

72 Reliance Industries Acquisitions, available at: https://startuptalky.com/reliance-industries-acquisitions/.

73 Media and Entertainment Industry, available at: - https://www.ibef.org/industry/media-entertainment-india.aspx.

74 Supreme Court gives telecom companies 10 year to pay INR 1.4 lakh crore dues to government, available at: http://timesofindia.indiatimes.com/articleshow/77866214.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst.

77 Revision of IPv6 Transmission Timelines, available at: https://dot.gov.in/sites/default/files/2020_02_12%20IPv6%20Timelines.pdf.

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