Elon Musk's Starlink, Bharti-Backed OneWeb To Benefit As India's New Telecom Bill Paves Way For Allocation Of Satellite Spectrum

The 2023 Telecommunications Bill has paved the way for the administrative allocation of spectrum for satellite broadband services, aligning with the global standard for spectrum assignment.

This could potentially be a significant victory for entities such as Bharti Airtel's OneWeb, Elon Musk's Starlink, and Amazon's Kuiper.

The task of allocating spectrum for satellite communications, either via auction or administrative distribution, was central to a disagreement between the government and a divided industry.

The telecom department even sought advice from the telecom regulator TRAI on procedures for auctioning satellite spectrum.

Previously, Reliance Jio had advocated for the auctioning of the spectrum instead of its administrative allocation.

Conversely, OneWeb had urged the government to opt for administrative allocation and levy a fee for it to encourage investment and ensure market-friendly prices.

Additionally, Musk's Starlink suggested that the regulatory framework should include minimal charges as spectrum use fees to guarantee affordable service access.

The Supreme Court's 2012 judgement in the 2G case, which deemed the Congress-led UPA government's allocation of 2G spectrum as illegal and an arbitrary use of power, serves as a backdrop to this.

The ruling led to the cancellation of over a hundred telecom licenses given to various companies.

Since this judgement, the government's allocation of spectrum for most commercial uses has been largely avoided due to the discretionary nature of such decisions.

The allocation of satellite spectrum varies from its terrestrial counterpart, which is typically employed for mobile communications.

Due to its inherent lack of national territorial boundaries, the satellite spectrum is international. As a result, its coordination and management fall under the jurisdiction of the International Telecommunications Union (ITU), a UN agency.

The government's decision to permit the allocation of satellite spectrum in the Telecommunications Bill is attributed to the fact that there is no global precedent for auctioning such airwaves.

The unexpected inclusion of the Bill in Parliament's agenda late Sunday evening allows the central government to assume control and management of telecommunication services and networks for national security purposes or in case of war. This provision is part of the Telecommunications Bill, 2023, which was presented in the Lok Sabha on Monday.

Experts and a section of the government believe that the current Bill's definition of telecommunication services, although pared down, is still broad enough to potentially regulate online platforms. This is a contrast to a 2022 draft that explicitly identified online communication services such as WhatsApp, Instagram, and Telegram as telecommunication services.

The bill aims to supplant the Indian Telegraph Act of 1885, the Wireless Telegraphy Act of 1933, and the Telegraph Wires (Unlawful Possession) Act of 1950. These are perceived by the government as outdated laws from the colonial era that necessitate structural reforms, particularly in light of the substantial changes that the telecom sector has undergone in recent years.

The legislation permits the Central Government, through a notification, to assume control and management of, or to suspend the operation of any or all telecommunication services, or any part of a telecommunication network associated with such services. This action can be taken in the interest of national security, maintaining amicable relations with foreign nations, or during wartime.

The bill also raises a significant dispute regarding its intention to classify internet-based communication services as telecommunication services. The earlier version of the bill explicitly included services such as electronic mail, voice mail, voice, video, and data communication services, among others.

As per the new Bill, telecom services and networks will need an authorisation from the government, unless it decides to exempt certain entities in public interest.

In the new Bill, the definition of telecommunication has been kept as: “transmission, emission or reception of any messages, by wire, radio, optical or other electro-magnetic systems, whether or not such messages have been subjected to rearrangement, computation or other processes by any means in the course of their transmission, emission or reception”.

And ‘messages’ has been further defined as “any sign, signal, writing, text, image, sound, video, data stream, intelligence or information sent through telecommunication”.

The 2012 supreme court ruling, which deemed the 2G spectrum allocation as illegal, resulted in a stringent prohibition on the government's allocation of natural resources such as spectrum. It is in this backdrop that the Telecom Bill is significant — that administrative assignment of spectrum may have advantages too.

The proposed legislation presented to Parliament also establishes qualifications necessary for the appointment of the chairperson of the Telecom Regulatory Authority of India (TRAI) from the private sector.