Draft Telecom Bill a 'wilful misinterpretation of how digital economy works', says IAMAI

As the last date for submitting recommendations on the draft of Indian Telecommunication Bill, 2022, comes to an end, the Internet and Mobile Association of India (IAMAI) in a statement expressed that it has been appalled at the ‘regression and denigration of the discussion’ around the draft bill for regulating the digital economy.

While the new draft Telecom Bill proposes to bring internet-based calling and messaging services under the telecom rules, it also plans to bring Over-The-Top (OTT) communications service within the ambit of the same.

Through a statement, IAMAI said that let alone the government’s goal of creating a $1 trillion digital economy, a part of the telecom infrastructure industry has sought to reignite discussions that threaten to erase the progress that the Indian tech industry has achieved so far.

According to the data released by the Union Ministry of Electronics and Information Technology (MeitY), IAMAI said, India’s digital economy has grown tremendously over the past decade and has generated over $200 billion of economic value each year.

As per IAMAI what has played an integral role in the growth journey of digital economy, was the compartmentalisation of legislations regulating carriage and content. The statement read, “By regulating carriage and content separately, India has enabled the growth of both OTT service providers as well as traditional telecommunication service providers.”

Furthermore, the not-for-profit industry body for representing digital bodies, also pointed out that the rapid creation of India’s 100+ unicorns is a testament to this phenomenon.

“Despite this astronomical growth that has allowed India to leapfrog into becoming a global start-up hub, the recently concluded consultation on the Draft Telecom Bill betrays either a wilful misinterpretation or a fundamental lack of understanding of how the digital economy works,” IAMAI statement read.

In the views of IAMAI, an industry body representing the telecom infrastructure sector has championed the creation of revenue-sharing mechanisms for the OTT layer within the ambit of the Draft Telecom Bill.

“The implications of this move would be as far-ranging as they would be devastating. Creating room for licensing provisions applicable to over-the-top service providers presents an existential threat to India’s start-up ecosystem by creating herculean barriers to entry. Not only would this mean that aspiring Indian start-ups which are still evolving and developing their business and monetisation models will risk massive compliance costs in their infancy, but also would mean that foreign investors bullish on Indian start-ups may experience a chilling effect owing to the drastic policy uncertainty,” the IAMAI said.

“Despite this, certain policy experts continue to propagate fantasies about equitable contributions from stakeholders within the OTT layer, which would only seem to strengthen the gatekeeping abilities of the owners of the infrastructural layer on which OTT services operate. These changes would only establish additional sources of revenues for well-established sectors while leaving the start-up ecosystem vulnerable to compliance costs even when they may be pre revenue,” it went on to add.

IAMAI further said that in its letter to the DoT it has expressed grave concern about the impact of these changes on India’s start-up ecosystem and the digital economy.

Furthermore, it also sought to illustrate the success of the extant regulatory framework that facilitated the creation of unicorns and led to the unprecedented growth.

Therefore, it went on to add, that after keeping all these points in mind, “IAMAI has recommended that the scope of telecommunication services be reviewed and be limited to only services which distribute spectrum in a utilisable form. The time-tested distinction between telecom spectrum-controlling entities and spectrum-using companies should be maintained as it has been the basis that has allowed innovation and deeper penetration of the internet in India.”

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