 | Issue: | Asia-Pacific I 2006 |
| Article no.: | 11 | |
| Topic: | Communications law and development in India | |
| Author: | Rishi Chawla | |
| Title: | President of the Internet Society (ISOC), New Delhi, and Managing Trustee, Center for Communications Law & Policy Research | |
| Organisation: | Internet Society (ISOC), New Delhi, and Trustee, Center for Communications Law & Policy Research | |
| PDF size: | 52KB |
About author
Rishi Chawla is a lawyer based in New Delhi, India, specialised in ICT laws and policies. Mr Chawla is the President of the New Delhi Chapter of the Internet Society (ISOC) and Managing Trustee of the Center for Communications Law & Policy Research (CCLPR). He works in this capacity to promote user-friendly policies, liberal laws targeted towards ICT for all, and dissemination of Internet related knowledge. Mr Chawla serves on the governing board of NIXI as its Legal Director. NIXI is the Internet Exchange of India and the country’s Internet domain registry (.IN registry). Rishi moderates the group focussed on ICT Policies in India. He works closely with India’s Ministry of Communications and IT, the ISP Association of India, the Telecom Regulatory Authority of India and other stakeholders in ICT. Rishi Chawla is the editor for www.icpolicy.org, the gateway for India’s ICT Policies, and has spoken at many national and international forums. He holds a degree in law and Management.
Article abstract
India has seen tremendous growth in the ICT sector due to reforms initiated by its regulatory authority and the progressive policies of its government. Key reforms include the introduction of a level playing field for multi-operator competition, unified access licensing, a calling party pays regime and reduced access deficit charges. Liberalised ISP licensing, frequency de-licensing for Internet access and partial legalisation of VoIP have contributed to Internet growth. The Government of India is currently examining the question of converged licensing.
Full Article
Information and Communication Technologies (ICT) will define the socio-economic direction of nations in the years to come. The development of communication services is essential to the overall development of a country’s citizens and to improve its competitiveness in the international market. Without efficient, high quality communications, the businesses that operate in the country face disadvantages compared to their competitors in the international market. A legal and policy framework that enables the growth of ICT is a pre-requisite for the growth of IT and its wide usage by the people. Reforms of the communications laws and policies help the growth and usage of ICT within a country substantially. An appropriate, enabling, legal environment and progressive ICT policies also help attract much-sought Foreign Direct Investment (FDI) in the ICT sector and help narrow the digital divide that has become a hot issue among all the countries. Legal and regulatory reforms In the last two decades, India has seen tremendous growth in the ICT sector largely attributed to the legal and regulatory reforms initiated by the Telecom Regulatory Authority of India and the progressive policies adopted by the Government of India. Such government initiatives have also improved FDI in the sector. Telecommunications driven growth of the GDP accelerated from 6.3 per cent per annum during 1980-1991 to an impressive 18 per cent per annum during 1991-2001. Some of the legal and regulatory reforms and policy initiatives of the Indian Government, which helped in the development of the communication sector, are discussed below. Competition in the telecom sector The National Telecom Policy of 1994 introduced limited competition in India’s Telecom sector. However, a level playing field in the sector was only possible after the creation of the Telecom Regulatory Authority of India in 1997. The New Telecom Policy of 1999 introduced true competition in the sector. The underlying theme of the new policy was to usher in full competition through unrestricted entry of private players in all service sectors. The policy favoured the migration of existing operators from the era of the fixed license fee regime to that of revenue sharing. With these reforms, the telecom sector began witnessing a growth trend never before seen. Introduction of the multi-operator competitive regime made it possible for the teledensity to increase more than 2 per cent per year. From 1998 to 2005 the urban teledensity increased from a meagre 5.8 per cent to 33 per cent. The public/private partnerships and the competition in telecommunication services, resulting from a liberalised regulatory regime, have also brought great benefit to the Indian economy and telecom subscribers. The competition led to immensely improved performance in both the public and private sectors. Between 1948 and 1998, the public sector grew by 0.3 million subscribers every year. The growth after liberalisation was a staggering 5 million subscribers every year. As the competition grew, tariffs quickly dropped heavily and consumers were happy. The Telecom Regulatory Authority of India helped reduce tariffs by increasing competition and introducing regulatory changes such as Unified Access Licensing, the calling party pays regime, reduced access deficit charges, and the like. The Government of India also encouraged the reform process by substituting high entry fees with revenue sharing to further reduce the revenue share. Internet licensing policy The state-owned Videsh Sanchar Nigam Limited (VSNL) launched Internet services in India in August 1995. For the first four years, VSNL was the sole provider of Internet services in the country. In November 1998, the government ended VSNL’s monopoly and allowed private operators to provide Internet services. The Internet Service Provider License was quite liberal; Internet service providers, ISPs, paid no license fees until after 31st October 2003. Thereafter, a token license fee of Rs.1 per annum was charged. There is no restriction on the number of ISP licenses issued. ISPs can set their own tariffs, establish their own international gateways and provide radio and fibre last mile access. They can also use the cable TV operators’ infrastructures to provide last mile access. The result of the competition in the Internet sector is clearly visible in the growth of the Internet subscriber base which grew from a mere 0.1 million in 1995, and 0.5 million in 1996, to an impressive 4.10 million in 2003. The real entry-level barrier is the Performance Bank Guarantee; this can be as high as 0.4 million US dollars depending on the area of operation. This, in my opinion, is too high. The Government of India should consider eliminating the bank guarantee in order to let small ISPs enter the Internet provision market and help it grow beyond the urban areas. The Information Technology Act of 2000 Electronic communications, electronic governance, electronic commerce and all other forms of electronic transactions can only grow if there is an enabling legal environment that recognises the legal validity of electronic transactions and binds the parties to them. India recognises the opportunity provided by cyberspace and was among the first countries to enact a law recognising electronic transactions and defining cyber crimes. The Information Technology Act was enacted in October 2000. Based on the UN Commission on International Trade Law (UNCITRAL) model law, it provides legal recognition of electronic communications, thereby facilitating the growth of e-commerce and e-governance. The Act is undergoing amendments because of the need to make it technology neutral and introduce provisions regarding data protection and privacy. De-licensing 2.4 GHz for wireless Internet Until recently, Internet users in India needed a license to use Wi-Fi or Bluetooth. This hindered the growth of wireless Internet technologies such as Wi-fi and Wi-Max. However, recognising the opportunities these technologies provided for the development of communications in India, the Indian Government de-licensed the 2.4 GHz and 5.1 GHz frequency bands. This resulted in the creation of a great number of Hot Spots in the country and the growth of wireless projects in the remote and rural areas. Permitting Internet telephony Internet telephony benefits the public at large by lowering the cost of long distance phone calling. It is not only a cost effective way to communicate for businesses, but also makes long-distance calling accessible to the country’s low income population who welcome the chance to maintain contact with their families in distant villages. Until April 2002, it was illegal to use Internet telephony in India. In April 2002, the Government of India allowed the use of Internet telephony based upon the recommendations of the Telecom Regulatory Authority of India. Though the scope of Internet telephony includes calls made to international destinations, it excludes calls made to destinations within the country. Moreover, only Internet service providers that have Internet telephony licenses can provide Internet telephony. To make the benefits of Internet telephony available to the common man, the Government must extend the scope of Internet telephony to include calls made to national destinations and allow non-ISPs to also provide such services. Liberalising registration of .in county code top level domain names In October 2004, the Government of India announced a new policy for .in domain name registration focusing upon creating a hassle-free online procedure and reduced pricing. Earlier registration of the .in domain name required the entity to have some kind of legal existence in India (trademark, registered company, society, etc.) and the procedure for registration was long and hectic. However, under the new policy, .in domain names are allotted on a first come first serve basis and no documentation is required. This change in policy has resulted in the growth of .in domain name registrations from a mere 5000 domains to more than 150,000 domains. Law for the Converged Network Communications technologies are merging and so must the laws and regulations. The growth of cable TV in India shows that Indian consumers value multi-sourced information and entertainment much more than fixed line telephone services. By encouraging triple play networks, the popularity of cable TV in India can be leveraged to increase the penetration of communication services in remote and rural areas. IP-based, next generation networks would be possible if India adopted a converged network/licensing regime. The Government of India is currently examining the issue of adopting the converged licensing regime delineated by the Communications Convergence Bill. This convergence bill provides for a super-regulator called the Convergence Commission of India, which will regulate the telecom, IT, Internet, information and broadcasting sectors. India has made progress in the communications sector by liberalising its laws and regulations. The regulator and the government have been largely successful facilitating the growth of the communications sector. Other developing countries might want to adopt the regulatory and legal practices adopted by the Indian Government to successfully promote the communication sector in their own countries. However, they should act quickly, before its too late and they miss the bus.
