Preliminary inputs on National Digital Communications Policy

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Preliminary inputs on National Digital Communications Policy

Vertika Misra

@vertika@nasscom.in

September 27, 2024

Public Policy

Nasscom submitted its inputs on the National Digital Communications Policy (NDCP) to NTIPRIT/ DOT. Understanding the new market dynamics is crucial for policy formulation, as digital communication directly impacts innovation, investment, and productivity in India. The field continues to evolve, encompassing:

Machine-to-machine communication
Domestic and industrial Internet of Things (IoT)
Edge computing
Vehicle-to-everything communication (autonomous vehicles)
Cloud integration (enabling rapid scaling of M2M systems, managing millions of connected devices, and providing vast data storage for IoT-generated information)

While NDCP 2018 recognised the rapid proliferation of mobile phones, internet, social media platforms, digital payments, and data consumption, India has since experienced a surge in enterprise-level data traffic due to inter-data center connectivity. This increase stems from greater cloud adoption, AI applications (including generative AI), and the shift towards time/latency-sensitive applications. Additionally, the upcoming 6G technology and increased integration of AI/machine learning in digital communication will place significant pressure on existing networks.

Consequently, NDCP 2024 must address future demands by establishing appropriate thresholds, benchmarks, and mediums to ensure:

Uninterrupted connectivity
Enhanced service quality
Minimal latency
High data volume availability

Further, post NDCP, 2018 India rolled out the 5G technology. We suggest that NDCP, 2024 should assess whether the adoption of 5G has been satisfactory so far and think of the possible next steps to ensure potential benefits of 5G (like, IoT, Meta verse, etc) are realised.

Equally, NDCP, 2024 should acknowledge the diverse landscape of emerging digital communications, each with unique attributes, business models, and risks. This necessitates a nuanced approach rather than the rigid framework applied to legacy telecommunications. To maximise innovation and minimise associated harms, governance principles should be designed with these differences in consideration. An activity-led, risk-based approach—focusing on use cases rather than technologies themselves—can help balance benefits and risks while avoiding unintended consequences of heavy-handed interventions.

India's new Telecommunications Act, 2023 reflects this shift by adopting the term ‘authorisation’ instead of ‘license’ (as used in the Telegraph Act, 1885 and other telecom laws). This change suggests a renewed policy perspective based on an activity-led, risk-based approach where obligations are proportionate to associated harms and risks.

Further, it must be noted that cross-cutting nature of digital communications across sectors may involve multiple regulatory jurisdictions (e.g., banking, insurance, health), necessitating a coordinated and multi-pronged approach.

However, the current narrative and debate of same service same rule (telcos demanding a level playing field with OTTs) in the communications sector misses all the above considerations and runs the risk of creating/projecting artificial regulatory harms.

In 2018, NDCP emphasised digital inclusion through the Universal Service Obligation Fund (USOF), but since then India has witnessed significant growth in digital public infrastructure (DPI) and smartphone adoption as tools to ensure inclusivity. While maintaining USOF's relevance for last-mile connectivity, NDCP 2024 may have to think of digital inclusion using the scope of DPI and address challenges such as implementing compatible protocols for the large population still using feature phones.

In summary, NDCP, 2024 needs to be mindful of path dependency which will require constant questioning and revisiting past policy actions and decisions in the light of current market characteristics and future trends. While historical context remains valuable, NDCP 2024 must be forward-looking and adaptable to effectively address the sector's disruptive changes and evolving business models in digital communication. Otherwise, this may create challenges both business wise and regulation wise thereby impeding the organic growth of the market.

With this background, we have identified the following services where there is a strong case for rationalisation considering the huge technological advancements and evolved business models. We have also suggested relevant objectives in the NDCP, 2024 under which these could be covered. The objectives are listed below:

Objective 1: Encourage and enable Infrastructure

Objective 2: Ensure regulatory clarity for promoting start-ups and MSMEs

Objective 3: Ensure a comprehensive approach for harnessing emerging technologies

Objective 4: Enable nationwide licensing to catalyse investments for digital communications sector

Objective 5: Enable efficient spectrum utilisation for generating public goods and accelerating Industry 4.0

Build periodic review mechanism into NDCP, 2024

An important aspect for effective implementation of any policy is to have a robust review mechanism. The Government should consider setting up an industry advisory committee consisting of representatives from government, industry experts as well industrialists to advice and guide government on industry trends, requirements, and policy advocacy. To ensure effective implementation of the NDCP, the government should organise periodic meetings with the committee (quarterly/half yearly) to discuss the progress and implementation of the policy. Further, the Government should publish an annual review of the NDCP, 2024.

These were our preliminary inputs to be considered in formulation of the proposed NDCP draft. Once the draft is released for public consultation, we would submit detailed inputs.

Please see the attachment for our detailed submission. For more details, please write to Vertika Misra at vertika@nasscom.in or Sudipto Banerjee at sudipto@nasscom.in with a copy to policy@nasscom.in.

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Vertika Misra

Director - Public Policy

Call for Inputs: SEBI's consul...

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