Technology, Media and Telecommunications

The past quarter witnessed several regulatory and legislative developments in the crypto, telecom and cybersecurity space. In this update, we discuss some of these developments that businesses should watch out for.

Nikhil NarendranPartner

Swati MuthukumarSenior Associate

Dayaar SinglaAssociate

In the last quarter, we saw an increase in regulation in the crypto space through the budget announcements, as well as exciting developments in the telecom and data regulation arenas. The government signalled towards a more robust cybersecurity regime. On the telecom front, after a busy 2021 with multiple reforms in the sector through a crucial relief package, the industry is gearing up for the introduction of 5G. It will be interesting to see how these developments shape up 2022 for the tech and telecom sector as well as businesses at large.

Key Developments

  • Draft India Data Accessibility and Use Policy 2022

    The Ministry of Electronics and Information Technology (MeitY) published the draft India Data Accessibility and Use Policy, 2022 (DAU Policy), which seeks to transform India’s ability to harness public sector data by maximising the access to and use of such data for improving policymaking, facilitating the creation of public digital platforms as well as promoting transparency, accountability and ownership in data sharing and release.

    The draft DAU Policy will be applicable to all non-personal data and information created and collected by the Government of India. The MeitY will set up an India Data Office (IDO) to streamline and consolidate data access and sharing of public data repositories. All public data will be made shareable and open (i.e., free to use, reuse and redistribute, machine-readable and easily accessible). However, this will not apply to public data which falls under a negative list, or data which can only be shared with trusted users in a controlled environment, after requisite permissions from the relevant departments have been obtained (i.e., restricted data). Under the DAU Policy, all ministries/departments will comply and implement the anonymisation standard prescribed under law or by IDO/MeitY.

    Along the same lines, Tamil Nadu has implemented Tamil Nadu Data Policy (TNDP), which also furthers similar objectives of data-sharing with third parties such as private players and intends to lay out governmental processes for providing good data governance.

  • Consolidated list of the telecom reforms introduced in 2021

    The Department of Telecommunications (DoT) has released a consolidated list of telecom reforms introduced in 2021, including notifications pertaining to rationalisation of adjusted gross revenue and bank guarantees paid by telecom service providers, encouragement of spectrum sharing, and 100% foreign direct investment (FDI), amongst others. (To read our detailed update on the telecom reforms, click here.)

  • Push towards launch of 5G

    The Prime Minister’s Office (PMO) has expressed its desire for the initial launch of 5G in India by 15 August 2022. As per media reports, in view of the PMO’s expectation of the launch, the DoT had requested TRAI to submit its recommendation on the reserve price of spectrum for 5G auctions by March 2022. TRAI accordingly released its recommendations on 11 April 2022 which included lowering the base price across spectrums, amongst others.

    TRAI has also issued a consultation paper on ‘Use of Street Furniture for Small Cell and Aerial Fiber Deployment’ which focusses on issues related to outdoor small cell deployments. Small cells are low-powered radio access nodes or base stations operating in licensed or unlicensed spectrum that have a coverage range from a few meters up to a few hundred meters. The paper recognises that the dense deployment of small cells is critical for ensuring mass adoption and availability of 5G services and is required to enable features of 5G to be fully exploited. Accordingly, TRAI has invited comments on the manner in which the use of small cells may be incentivised and the broad framework that may be followed in deploying them.

  • Developments in regulation of cryptocurrency

    The past quarter has been a mixed bag for the cryptocurrency space. Although the Finance Minister, in her post-budget conference, indicated that the Indian government is yet to clarify how it intends to regulate crypto assets, the budget itself proposed a 30% tax on income from the transfer of any virtual digital asset. The responsibility for paying the tax will rest with the buyer of these assets. Further, loss from the sale of virtual digital assets will not be allowed to be set off against any other income. This announcement was notified and published in the official gazette through the Finance Act, 2022 and has become effective from 1 April 2022. (To refer to our update on the scheme for taxation of virtual digital assets, click here.)

    Further, in light of multiple complaints regarding crypto advertisements attempting to attract consumers without full disclosure of the risks, the Advertising Standards Council of India (ASCI) released guidelines for the promotion and advertisement of crypto and non-fungible tokens. These guidelines will apply to all advertisements published after 1 April 2022 and are based on several rounds of discussions with the government, finance sector regulators and industry stakeholders. While its guidelines are not legally binding, where someone has previously breached them, ASCI has published their names and also escalated such cases to the relevant regulator.

    While the Reserve Bank of India (RBI) has also not officially stated its stance on cryptocurrencies, in a keynote address delivered at the Indian Banks Association’s 17th Annual Banking Technology Conference and Awards, the Deputy Governor of RBI stated that ‘banning cryptocurrency is perhaps the most advisable choice open to India’.

  • Proposal for a new cybersecurity regime

    The Union Minister of State for Electronics and Information Technology, Rajeev Chandrasekhar, has reportedly stated that the government is considering a new cybersecurity regime to ensure that organisations report cyber security crimes without concealing them. It will also be mandatory for organisations to report data leaks. As per media reports, if incidents are reported, the Indian Computer Emergency Response Team can alert organisations about the associated security vulnerabilities which would enable firms not yet affected to take precautionary measures such as deploying security patches and improving cybersecurity infrastructure.

  • DoT issues amendments and guidelines for M2M services and audiotex license

    The DoT has amended the Unified License (UL) and UL for Virtual Network Operator (UL(VNO)) to include Machine to Machine (M2M) services within the scope of authorisation under these licenses.

    M2M Services are those where two distinct technological entities (such as routers or autonomous vehicles) communicate with each other with minimal human intervention. Under the erstwhile regime, there was no separate authorisation for provision of telecom connectivity to M2M services under the telecom licensing framework. The revised UL and UL(VNO) licenses bring within their purview M2M connectivity providers that provide services exclusively through technologies using unlicensed spectrum in addition to those that use licensed spectrum.

    This authorisation allows an entity to provide the following services:

    • access to and integration of resources;
    • support and control of M2M/Internet of Things (IoT) capable infrastructure;
    • offering of M2M/IoT capabilities including network capabilities and resource exposure to other providers;
    • provision of services through low-power wide area network or equivalent technologies; and
    • provision of services through radio access.

    Further, the DoT has also recently notified the ‘Guidelines for Registration Process of M2M Service Providers & WPAN/WLAN Connectivity Providers for M2M Services’ (M2M Guidelines). These Guidelines make a significant expansion to the scope of M2M services by providing examples of services that may be classified as M2M Services including fleet management, supply chain management, agriculture automation, smart utilities including power, water, gas, etc.

    The newly amended UL regime also covers authorisations for audio conferencing, audiotex and voice mail services. The previous regime enabled audiotex services to be provided through the UL(VNO) access license. Now, these services can be offered through a UL audiotex/audio conferencing license, which has comparatively lesser compliances.

The tech regulatory space continues to be ever-evolving and with the introduction of 5G, we can expect a lot more activity in this area. The Data Protection Bill is also expected to be approved by the government soon and may be introduced in the monsoon session of the Parliament (to read our update on the Data Protection Bill, 2021, click here). The government has also been pushing for unbundling of platforms and we may see the Open Network for Digital Commerce (ONDC) creating major shifts in the e-commerce space. To know more about ONDC, watch our video here.

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