LICENSE OR REGISTRATION

Clause 26

Licence or Registration of Service Providers

127. Clause 26 states: -
"(1) Having regard to the necessity of serving the public interest, ensuring competition and prevention of monopoly in the provision of network infrastructure facilities and communication services, the Commission may, by regulations specify: -
(i) eligibility conditions for granting of licenses or registrations;
(ii) restrict Lions regarding ownership and control of the media;
(iii) restrictions on the number of licenses or extent of accumulation of interest in such licenses by a person; and
(iv) such other conditions as may be considered necessary from time to time.

(2) (a) The Commission may determine by regulations, the obligations, conditions, restrictions, tariffs and rates subject to which a service provider, shall provide facilities and services referred to in subsection (1).
(b) The Commission may, by regulations, determine the conditions subject to which a license or registration may be granted or transferred and where a license or registration is transfer-red, the transferee shall be deemed as licensee or grantees, as the case may be, for the purposes of this Act.

(3) Subject to the provisions of sub-section (1), the Commission may grant license or registration in such manner, and within such time, subject to such terms and conditions, on payment of such fee and after following such procedure as may be determined by regulations:
Provided that the fee for registration shall not exceed thirty thousand rupees.

(4) The Commission shall notify, from time to time, one or more schemes or plans for licensing or registration containing such details as may be specified by regulations:
Provided that the Commission shall, before finalising such schemes or plans, consult the Central Government in order to ensure that the defence interests of India are fully protected.

(5) Any scheme or plan referred to in sub-section (4) may provide for eligibility conditions, number and scope of licenses and registrations and such other matters as the Commission may consider necessary.

(6) The Commission may grant license to any person....
(a) to provide or own network infrastructure facilities.
Explanation --- For the purpose of this clause, network infrastructure facilities shall include earth stations, infrastructure, wireless equipment, towers, posts, ducts, and pits used in conjunction with other communication infrastructure, and distribution facilities including facilities for distribution;

(b) to provide networking services.
Explanation --- For the purposes of this clause, networking services shall include bandwidth services, fixed links and mobile links;

(c) to provide network application services.
Explanation --- For the purposes of this application services shall include public switched telephony, public cellular telephony, global mobile personal communication by satellite, internet protocol telephony, radio paging services, public mobile radio trunking services, public switched data services and broadcasting (radio or television service excluding continued);

(d) to provide content application services. Explanation --- For the purposes of this clause, content application services shall include satellite broadcasting, subscription broadcasting, terrestrial free to All India Radio television broadcasting and terrestrial radio broadcasting;

(e) to provide value added network application services such as internet services and unified messaging services.
Explanation --- For the removal of doubts, it is hereby declared that Information Technology enabled services such as call centres, electronic-commerce, tele banking, tele-education, tele-trading, tele-medicine, webcasting, personal website, videotex and video conferencing shall not be licensed under this Act.

(7) The Commission may, while granting a licence for any of the categories under sub-section (6), confine or limit the scope of the facility or service to be provided by the licensee in each category of license, and also specify the conditions for providing that facility or service.

(8) The Commission may, while granting a licence under sub-section (6), grant licenses either singly or jointly for one or more of the categories of facilities or services specified therein:
Provided that no licence shall be granted under this sub-section, if it conflicts with the objectives and guiding principles set out under this Act particularly in relation to ensuring fair access and promotion of competition.
Explanation --- No license shall be required in respect of any person or class of persons, or any facility or service, which has been exempted under the proviso to clause (b) of sub-section (1) of section 4 unless specifically notified by the Central Government for the purposes of licensing under this Act".

128. In regard to the above-mentioned clause the Committee received a number of representations from many individuals/organisations and some of them appeared before the Committee to put across their concerns. Their suggestions/comments broadly were that there was need to reduce the number of licence categories (with necessary changes being made in the definition of these categories in Clause-2 of the Bill), that single/composite licensing system should be provided, that categorisation of different services under the five licence categories is not very clear and coverage of categories is not exhaustive and that the proposed licensing scheme may lead to over regulation/inappropriate regulation of the sector etc.

129. Asked to comment upon the above-mentioned views/suggestions, the Department stated that five categories of licenses have been specified to take account of the existing system of licenses and the fact that currently different categories of licenses have different licence obligations etc. While the first two licence categories in the Bill correspond to the existing IP-I and IP-II categories, the other three licence categories broadly reflect existing service wise classification of licenses.

130. It has further been stated that the five categories of licenses specified in the Bill would help the Commission to frame licensing schemes or plans keeping in mind the historical/existing sting licences issued to various licensees. It would also help in providing a seamless migration to the new licensing regime. The provisions also make clear that the list of services is not exhaustive.

131. The Department of Telecom has also stated that it has not been possible to provide for single licence since each category of service carried its own licence conditions, entry fee, roll out obligations etc and that it also has not been the international practice. 132. However, composite licensing has already been provided for - firstly because the new licensing regime will replace the existing large number of licence categories into only five and secondly because the scheme of composite licences has been further taken care of by Clause 26(8) of the Bill which empowers the Commission to grant licences either singly or jointly for one or more of the categories.

133. The Committee is more or less satisfied with the reply of the Department to the extent of introduction of five categories of licenses as per the norms to take care of different categories of licensees who have different licence conditions, entry fee, roll out obligations etc. However, the danger of the sector being over-regulated or of inappropriate regulation cannot be completely ruled out. It is, therefore, imperative that this extremely complex task is accomplished in an open and transparent manner with all fairness to the existing licensees so that there is no apprehension of under-investment or ineffective competition.

134. In order to remove confusion, the Committee recommends that 'explanations under Clause 26(6)(a), (b), (c) and (d) respectively should be removed.

135. The Committee further desires that in the Explanation under sub-clause (6)(c) of Clause-26 (line 37 of page -13), "webcasting, personal website" should be added after "tele-medicine" with a view to covering all IT enabled services.

136. The Committee further recommends that after the word 'media' in Clause 26(l)(ii) (line 30 of page no.12) "other than cinematographic films and print media like newspapers and allied publications should be added to avoid any ambiguity.

137. Similarly, in line 41 of page 12 relating to clause 26(2)(b) 'grantees' should be corrected as 'grantee' as the word 'licensee' in the same clause has been used in singular form.

138. The Committee recommends that in Clause 26(3) (page 12, line 46 and 47) for the words "provided that the fee for registration shall not exceed thirty thousand rupees" the words "provided that the fee for registration shall be determined by regulations but shall not exceed the amount as may be prescribed" may be substituted. This will obviate the necessity to make frequent changes in the Act when passed and also avoid repetition to this effect in Clause 27.

139. It is also not clear whether the registration fee and licence fee will have the same upper limit. This needs to be spelt out specifically.

140. The Committee also recommends that after line 45 of page-12 relating to Clause-26 (3), sub-clause 3(A) should be inserted as follows with regard to requirement of registration: -
"3(A) notwithstanding anything contained in sub-clauses (1), (2) & (3) above, the Central Government shall prescribe the facilities and services that require registration as aforesaid"

Clause No. 27

Period and form of Licence or Registration

141. Clause 27(l) of the Bill states "A licence or registration shall be granted for such period as may be specified by regulations".
27(2) reads "A licence or registration, granted under this Act, shall be in such form and shall be subject to the payment of such fee as may be determined by regulations:
Provided that the fee for registration shall not exceed the amount referred to in the provision to sub-section (3) of section 26:
Provided further that the Central Government may by notification, in the public interest, exempt my person or class of persons from payment of the licence fee or registration fee".

142. In this context, some of the witnesses have been of the view that since jurisdiction in relation to licensing vests with the Commission, the Central Government ought not interfere or grant such exemptions that would affect fair competition.

143. In response to that, the Department has stated that the clause should not be construed as being against the underlying principle of promoting a competitive environment as exemption from payment of licence or registration fee to any person or class of persons will be done by the Central Government "in public interest".

144. The Committee can not subscribe to the statement made by the Department, because any exemption from payment of licence or registration fee to any person or class of persons, even if accorded in public interest, can lead to situations such as inadvertently going against the underlying principle of promoting a competitive environment. The Committee, therefore, recommends that sub-clause (2) of Clause-27 (lines 7 to 14 of page-14) should be completely deleted and Clause '27(l)' should be numbered as '27'.

Clause-28

Duties of Service Providers

145. Clause 28(3) stipulates that every service provider holding a licence for distribution of broadcasting services shall provide a specified number and type of broadcasting services including those of the public service broadcaster and include only licensed broadcasting service in his delivery package for the purposes of distribution.

146. Some of the non-official witnesses have, requested for the deletion of the above-mentioned provisions as according to them it may amount to interference with the operator's nature of operations and affect his competitive ability besides causing undue hardship.

147. The Department has replied that it is a matter of detail to be specified in the subordinate legislation.

148. The Committee expects that the concern expressed in many quarters that the interest of the service provider will be hampered due to such provisions be taken note of while framing rules and Regulation under this Act. The Committee also recommends that in Clause 28(l) and (2) (lines 15 and 23 page14), the words "or applicable" which are redundant should be deleted in order to remove ambiguity.

Clause-29

Registration of Agreements

150. Clause 29 deals with certain agreements, which are to be registered with the Commission.

151. In order to maintain confidentiality of such agreements upon request by a licensee, the Committee desires to incorporate the following provison after Clause 29(c): -
"Provided that if specifically requested by a licensee, the Commission on being satisfied about the merit of such request, shall not disclose commercially confidential clauses in the agreements to third parties".
Provided further that where the Commission is not satisfied about the merit of such request, it shall give opportunity to the licensee of personal hearing.