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Licence raj in convergence

Bipin Chandran & Thomas K Thomas

It seems the days of licence raj are back. The Communications Convergence Bill 2001, tabled by communications minister Ram Vilas Paswan in Lok Sabha on Friday, has provisions that make it mandatory for individual users to apply for licences for availing of services like cellular phones, pagers and VSATs. However, the government has retained the power to exempt such a licensing requirement.

"No person shall possess any wireless equipment without obtaining a licence in accordance with the provisions of this Act: Provided that the central government may, by notification, exempt in the public interest any person from this section," says clause 5 chapter 2 of the bill.

The Bill also makes it compulsory for all the existing licensees for all the communications services, to apply for fresh licences within six months of the law being enacted.

The Convergence Commission of India also has the discretion to grant licences under the new act to the existing service providers after considering terms and conditions of the old licences. The Centre has, however, retained the powers to make the final decision on licensing issues.

The bill also introduced a universal service obligation fund for broadcasters and Internet service providers, a move that may put further burden on these service providers who are facing financial problems.

According to Amitabh Singal, secretary general, Internet Service Providers Association, "A USO fund for the service provider is not a good move for the ISPs as most of them are not generating good enough revenues to survive themselves." Currently, only the telecom companies contribute to the USO fund.

Besides, the bill also makes it mandatory for closed user groups using private communication networks to obtain licences to use these networks. Under the proposed law, for example a company using leased lines to link up its offices would require a licence to continue operate that network.

The bill also gives a free hand to the public broadcasting service providers (in this case the Doordarshan and AIR or any PSU company notified so by the Parliament) to set up networks and services without a licence.

The bill also provides for an adjudicating officer, apart from CCI and Convergence Appellate Tribunal to adjudicate whether any person has violated any of the licence agreements and impose a penalty of up to Rs 50 million. However, as per the provisions of the Bill, CCI also has similar adjudicating powers over the communication service provider.

Legal advisor to the Special Convergence Committee of the Associated Chambers of Commerce and Industry of India Ramji Srinivasan said, "while an interim order passed by the CCI can be appealed against, an order passed by the adjudicating officer cannot be further appealed."

"There was a need to review outdated regulations and take a fresh look at implementing new age policies because of the rapid changes in the technologies leading to convergence in the market place. We are glad that the convergence bill has exempted two sectors, IT enabled services and e-commerce, from the purview of licensing," Phiroz Vandrevala, chairman, Nasscom, said.

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